The Economic and Clinical Impact of Community Health Centers in Washington State

THE ECONOMIC AND CLINICAL IMPACT

OF COMMUNITY HEALTH CENTERS

IN WASHINGTON STATE

Analyses of the Contributions to Public Health andEconomic Implications and Benefits for the State and Counties

Submitted to:Community Health Network of Washington

Washington Association of Community and Migrant Health Centers

Submitted by:Dobson DaVanzo & Associates, LLC

December 3, 2008

Dobson | DaVanzo

Dobson | DaVanzo

The Economic and Clinical Impact of CHCs in Washington State | Page i

THE ECONOMIC AND CLINICAL IMPACT

OF COMMUNITY HEALTH CENTERS

IN WASHINGTON STATE

Analyses of the Contributions to Public Health andEconomic Implications and Benefits for the State and Counties

Submitted to:Community Health Network of WashingtonWashington Association of Community and Migrant Health Centers

Submitted by:Allen Dobson, Ph.D.Patrick McMahon, M.B.A., C.P.A.Steven Heath, M.P.A.Joan E. DaVanzo, Ph.D., M.S.W.

December 3, 2008

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The Economic and Clinical Impact of CHCs in Washington State | Page ii

Table of ContentsExecutive Summary....................................................................................................................... iv

Purpose ............................................................................................................................... v

Study Methods .................................................................................................................... vi

Findings from the Literature Review ................................................................................ vii

The WA CHC System as an “Economic Engine” .............................................................. ix

Economic and Tax Effects at the State Level ...................................................................... x

Economic Effects at the County Level ............................................................................... xi

Discussion and Conclusion.............................................................................................. xiii

I. Introduction and Purpose ........................................................................................................ 1

II. Study Methodology................................................................................................................. 3

Literature Search ................................................................................................................ 3

Primary Data Collection and Analytic Plan....................................................................... 4

Modeling Economic Impact of CHCs ................................................................................. 6

III. The CHC Role in the Safety Net.......................................................................................... 9

Background ......................................................................................................................... 9

History of CHCs.................................................................................................................. 9

Legislative Mandate for CHCs Hinders CHCs’ Ability to Counter Economic Downturns........................................................................................................................................... 10

Mission of CHCs ............................................................................................................... 13

CHCs share a common mission, aligned with Federal Government and Washington Stategoals of increasing quality and years of healthy life. ....................................................... 14

The WA CHC System Adds Collective Value in Local Communities................................ 16

Findings from the Literature Review ................................................................................ 20

Populations Served by CHCs in Washington State Reflect National Norms ....... 20

CHCs in Washington State Deliver Care that is Appropriate to Geography,Language, and is Culturally Competent................................................................ 24

CHCs Deliver High Quality Care, Achieving Positive Outcomes ....................... 26

CHCs are Cost Effective Providers....................................................................... 28

IV. The Economic Impact of CHCs on Their Communities.................................................... 30

Purpose and Overview: The Economic Context of CHCs ................................................ 30

CHCs are powerful economic engines in Washington State for at least six importantreasons. ............................................................................................................................. 31

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The Economic and Clinical Impact of CHCs in Washington State | Page iii

Summary Operating Statistics for Washington State CHCs ............................................. 33

The Impact of the Washington CHC System on State and County Economies ................. 36

Discussion and Conclusion............................................................................................... 53

Appendix A Washington State CHC Snapshots: Contributions to the Collective Value ............ 54

Appendix B Legislative Definitions and Requirements of Community Health Centers Section330 of the Public Health Service Act (42 USCS § 254b) ............................................................. 61

Appendix C Literature Review Evidence Tables.......................................................................... 89

Appendix D Data Collection Instrument ...................................................................................... 99

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The Economic and Clinical Impact of CHCs in Washington State | Page iv

Executive Summary

Community Health Centers (CHCs) represent one of the great “success stories” in the provisionof primary and preventive health care services. CHCs provide health care homes1 for vulnerablepopulations–those populations “at greater risk for poor health status and [reduced] health careaccess.”2 In addition, CHCs also serve as economic engines for their communities. The CHCprogram, from its inception, has fulfilled a dual economic and clinical purpose.

Nationally, CHCs serve over 17 million patients in 6,300 sites.3 CHCs deliver high quality, cost-effective, patient-centered primary care focused on vulnerable populations. Nationally, CHCsserve 1 in 8 Medicaid beneficiaries; almost 1 in 3 individuals in poverty; and 1 in 5 low-income,uninsured persons. Two-thirds of health center patients are members of racial or ethnicminorities, placing CHCs at the nexus of the national effort to reduce health care disparities.4

Because CHCs are located in rural areas and medically underserved areas with highunemployment and poverty levels, their impact on local area workforce and economicdevelopment is well recognized and significant.

In the State of Washington, CHCs offer a health care home for the entire community: forindividuals who are insured through either public or private insurers and for those who areuninsured or underinsured. Washington CHCs serve “the rising number of uninsured inWashington – the number of uninsured patients at health centers increased 42% since 2000”5

[through 2007]. The CHCs focus on service to local populations strengthening the social fabricand economic stability of Washington State communities.

1 Health care homes, also known as “medical homes”, are a “model of care delivery that includes an ongoingrelationship between a provider and patient, around-the-clock access to medical consultation, respect for a patient'scultural and religious beliefs, and a comprehensive approach to care and coordination of care through providers andcommunity services.” (The Association of American Medical Colleges.(http://www.aamc.org/newsroom/reporter/march08/medicalhome.htm).2 Shi L, Stevens GD. (2005) Vulnerability and unmet health care needs: The influence of multiple risk factors.Journal of General Internal Medicine, February 2005.3 For the purposes of this report, the term “CHCs” is used to describe medical facilities that meet the requirements of330 of the Public Health Service Act (42 USCS § 254b). Facilities include recognized Federally Qualified HealthCenters (“FQHCs”) and facilities that meet the requirements for FQHCs (“look alikes”).4

Shi L. The Role of Health Centers in Improving Health Care Access, Quality, and Outcome for the Nation'sUninsured. Testimony at Energy and Commerce Committee, Subcommittee on Oversight and InvestigationsCongressional Hearing entitled “A Review of Community Health Centers: Issues and Opportunities.” Washington,DC. May 25, 2005.5 2007 Snapshot: Washington’s Community Health Center System by Community Health Network of Washington(http://www.chnwa.org/PolicyAdvocacy/ResearchAndReports/WA%202007%20Fact%20Sheet%208%2012%2008%20(3).pdf) .

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The Economic and Clinical Impact of CHCs in Washington State | Page v

Purpose

Compelling evidence suggests that primary care services exert a pronounced effect on improvingclinical and functional health outcomes.6 Recent passage of legislation by the U.S. Congressreauthorizing the CHC program through FY2012 further demonstrates widespread acceptance ofthe importance of CHCs in caring for Medicaid, uninsured, and medically vulnerablepopulations.7

CHCs have been recognized for their ability to reduce health disparities by providing highquality primary and preventive care to predominately low-income, uninsured, high risk patients.8

CHCs further reduce barriers to care for these patients by customizing services to meet theirpatients’ unique health and cultural needs.9 CHC expenditures associated with achieving thesehealth effects—both directly and indirectly—improve community economic vitality.

Dobson DaVanzo & Associates LLC (“Dobson | DaVanzo”) was commissioned by CommunityHealth Network of Washington in collaboration with the Washington Association of Communityand Migrant Health Centers10 to study the economic and clinical impact of CHCs within theState of Washington, including estimating the economic, employment and tax effects of CHCson Washington State and selected counties.

An important aspect of our work was to examine CHC expenditures and county-levelexpenditures by Community Health Plan / Community Health Network of Washington(CHP/CHNW), a managed care plan and provider network created in 1992 by a group ofcommunity health centers across Washington State to improve access for vulnerable populationsto high quality, culturally competent care. We call these combined expenditures “WashingtonCommunity Health Center System” or “WA CHC System.” The acronym “CHC” refers only toCHC direct care delivery and expenditures. All our analyses were done at both the state and thecounty level. We believe this is the first time this type of analysis has been conducted.

The collective value of the WA CHC System demonstrates that “the whole is bigger thanthe sum of its parts”. WA CHC System expenditures for healthcare services, salaries, andoperating costs along with cost savings are put back into Washington’s localcommunities, in contrast to health care insurers and other for-profit providers that couldhave obligations to shareholders or other obligations out-of-state. The health plan’scollaboration with its community health center delivery system within the WA CHC

6 World Health Organization, Primary Health Care: A Framework for Future Strategic Directions Global Report.2003, WHO.7 HR 1343 “Health Centers Renewal Act of 2008”. Passed Oct 8, 2008: Became Public Law No: 110-355. 122 Stat.3988; 8 pages.8 Shin P, Markus A, Rosenbaum S, Sharac J. (2008) Adoption of health center performance measures and nationalbenchmarks. Journal of Ambulatory Care Management, 31(1):69-75.9 National Association of Community Health Centers, Inc. and The Robert Graham Center. (2007) Access Denied: ALook at America’s Medically Disenfranchised.10 The Washington Association of Community & Migrant Health Centers (WACMHC) is a non-profit organization,formed in 1985, to advocate on behalf of the low-income, uninsured, and underserved populations of WashingtonState served by community health centers.

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System gives it the ability to holistically and effectively address the health needs of thecommunities it serves.

Study Methods

To complete this study, we engaged in three separate activities, each with its own methodology.First, we reviewed the available research to understand the clinical contribution that CHCs maketoward improving the health of their patients and the populations of their communities. Theliterature also provides a qualitative understanding of how CHCs support community economicdevelopment. Second, we developed a survey to collect county-level expenditure andemployment data from Washington CHCs and CHP/CHNW in order to build a state and county-level database. Third, we used the input-output model IMPLAN to quantify the economic impactthat the WA CHC System makes on the state and counties of Washington.

IMPLAN is a type of applied economic analysis that tracks the interdependence among variousproducing and consuming sectors of an economy. More specifically, it measures the relationshipbetween WA CHC System expenditures and community and employment economic output. Wechose to use IMPLAN in this study because this modeling system is widely accepted, cost-effective, readily available to other researchers, and well suited to our study objectives.

Our analyses with IMPLAN enabled us to calculate the multiplier effects of changes in finaldemand for the WA CHC System on all other industries within a local economic area, in thiscase, the counties and State of Washington. Multipliers were estimated for the entire state andall the counties in which the WA CHC System has economic activity. “Value-added”calculations representing state and county gross domestic product (GDP) were also calculated.Finally, tax impacts were estimated.

Definitions of key IMPLAN components as applied to this study are:

Total economic effects are the combined effect or sum of WA CHC System direct,indirect, and induced effects.

Direct effect is the initial change in revenue, earnings, and employment (jobs) forthe WA CHC System.

Indirect effect is a change in inter-industry transactions, as supplying industriesrespond to the direct effects of the WA CHC System.

Induced effect is the change in downstream household spending caused by thedirect and indirect effects on household income.

Multipliers calculated by IMPLAN show the relationship between the direct effect andthe total economic effect. The direct effect times the multiplier produces the totaleconomic effect.

The Economic and Clinical Impact of CHCs in Washington State | Page vi

Tax effects represent State and local, as well as federal taxes on the total economic effect.

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Findings from the Literature Review

Based on our review of the literature, we note distinct similarities between Washington StateCHCs and CHCs nationally. Both nationally and in the State of Washington, CHCs target theirhealth care delivery to specific populations in medically underserved areas. The nationalliterature informs our understanding of how CHCs in Washington State deliver care that isappropriate to geography, language, and cultural context. Thus, our literature review findingsgenerally apply to Washington State CHC missions and clinical impacts on populations orunderserved areas.

CHCs Perform an Important Role in the Safety Net

Over the last forty years, CHCs have, in aggregate, become the largest primary care provider inthe U.S. The number and scope of CHCs have grown and evolved beyond their initial charge tobecome integral community resources. Although individual CHCs focus on local communities,federal law governs many aspects of Washington State CHC operations. Federal law defines aCHC and specifies who must be served, what care must be provided, and how the CHC must begoverned. For example, aside from participating emergency departments under EMTALA,11

CHCs are the only providers that are required to see all patients, regardless of their ability topay.

Numerous independent experts have found CHCs’ quality of care equal or better than the qualityof other primary care providers. 12,13 By serving as health care homes for vulnerable populations,CHCs have been able to create an effective health care system for these challenging patients.Vulnerable populations are characterized, in part, by sporadic health seeking behaviors andgreater use of more costly services.

Both National and Washington State CHCs Serve Vulnerable Populations

Evidence in the literature documents that CHC patients are among the highest risk populations inthe nation, including, for example, migrant farm workers and homeless persons. These patientshave been described as “significantly poorer, in significantly worse health, and…more likely tobe members of racial and ethnic minority groups” than patients of other providers.”14,15

In 2007, Washington State CHCs served 594,763 patients, providing 2,330,551 distinctencounters. Ninety percent of CHC patients (whose income level is known) were at 200

11 Emergency Medical Treatment and Active Labor Act (EMTALA). 42 USC 1395dd, part of the U.S. Code,“Examination and treatment for emergency medical conditions and women in labor.”12 Hicks LS, et al. (2006) The quality of chronic disease care in U.S. Community Health Centers. Health Affairs13 Chin MH, et al. (2000). Quality of diabetes care in Community Health Centers. American Journal of PublicHealth 90(3): 431-4.14 Dor A, Pylypchuck Y, Shin P, Rosenbaum S. (2008) Uninsured and Medicaid Patients’ Access to PreventiveCare: Comparison of Health Centers and Other Primary Care Providers. Research Brief #4, Geiger GibsonProgram/ RCHN Community Health Foundation Research Collaborative, August 13, 2008.(http://www.gwumc.edu/sphhs/departments/healthpolicy/chsrp/downloads/RCHN_brief4_8-13-2008.pdf)15 Source: Vital Signs: The Role of Community Health Centers in Washington State, Washington Association ofCommunity & Migrant Health Centers, Community Health Network of Washington, and Community Health Plan ofWashington, August 2008.

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The Economic and Clinical Impact of CHCs in Washington State | Page viii

percent, or below, of the Federal Poverty Level16 and approximately 30 percent were bestserved in a language other than English. Washington CHCs delivered approximately$25.6 million in enabling services, including case management, outreach,translation/interpretation, and eligibility assistance.17

The age distribution of Washington State CHC patients approximates the distribution of patientsin CHCs across the Nation. Washington State CHC patients are more likely to be Asian PacificIslander, Native American, Hispanic/Latino and White than nationally, and less likely to beAfrican American. Washington State CHC patients are more likely to be better served in alanguage other than English than national CHC patients.

CHCs in Washington State Deliver Care that is Appropriate to Geography, Language,and Cultural Context

The national literature contains substantial evidence that CHCs improve access to medical careand fill service needs in urban or rural areas that previously lacked services and/or providercapacity. Geographic areas that face shortages of health workers and facilities tend to be thesame areas that are most underdeveloped and/or economically depressed. In turn, this economicreality aggravates workforce shortages, incenting fewer physicians to locate in these medicallyunderserved areas.18

CHCs are, in many circumstances, the only professional health care option available to somepatients for basic care, providing services that are often unavailable or more difficult to obtainthrough private health care providers. At the most basic level, the lack of other professionalhealth services may be due to such factors as absence of transportation to a facility and/orinability to pay for services. For many patients, however, the lack of other professional healthservices may also include more complex factors such as language fluency, health literacy, andcultural competency.

Cultural competency generally refers to heightened awareness and knowledge of the needs of theindividual patient. Often, cultural competency manifests itself in a provider’s ability toaccurately interpret and respond to non-verbal or other cultural cues or in the way in whichhealth care organizations provide information to their clients.19

Language services for individuals with limited English proficiency are of growing importance inmaking treatment decisions and ensuring that patients receive appropriate care.20 These servicesinclude the provision and appropriate use of interpreters and translated materials, both foreducational and administrative purposes.

16 For instance, in 2008, the poverty threshold is $10,400 for a single person, $14,000 for a household of twopersons, and $21,200 for a household of four persons. (Federal Register, FR 3971–3972.)17 http://bphc.hrsa.gov/uds/2007data/washington/table8b.htm18 Expanding Care Versus Expanding Coverage: How To Improve Access To Care by Peter Cunningham and JackHadley in Health Affairs, July/August 200419 Measuring Cultural Competence in Health Care Delivery Settings: A Review of the Literature. Report submittedto Health Resources and Services Administration by The Lewin Group, July 2001.20 Dana RH (1998). Projective assessment of Latinos in the United States: current realities, problems, and

prospects. Cultural Diversity and Mental Health, 4(3), 165-184.

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CHCs are Cost-effective Providers

There is an ever increasing need in the policymaking arena for evidence of the cost-effectivenessof health care interventions. Evidence on the cost savings of CHCs is extensive.21

Although CHC patients tend to be more complex than the general population, there are studiesthat show that CHCs have been able to achieve 30% Medicaid savings by reducing avoidablehospitalization and other, more expensive care.22 Another comparison of costs between CHCsand other primary care providers found that CHCs spent, on average, 41%, or $1,810 less perpatient than the other providers.23 Nationally, these savings, resulting from lower reliance onmore costly care such as inpatient care translated into an estimated total savings of $10 billion to$18 billion in 2004 for providing care to 13 million low-income patients.

The WA CHC System as an “Economic Engine”

The literature review identifies numerous qualitative assessments of CHCs’ contributions to theeconomic vitality of their communities. From this perspective, we note six contextual reasonswhy WA CHC System expenditures are important to their communities. CHC expendituresrepresent, among other elements:

Sizable expenditures specifically focused on low-income, medically underserved andoften rural areas;

Expenditure dollars that are “imported” from outside of the community through federalgrants and public health care program spending;

An increase of state economic leverage through federal Medicaid matching funds;

Employment that strengthens the communities’ social fabric by reducing unemploymentand poverty;

Safety net services that reduce local hospital and physician bad debt and charity carestrengthen provider finances—resulting in improved care for all patients, not just WACHC System patients; and

A reduction in system costs since CHCs reduce more expensive inpatient care bysubstituting preventive care.

21 Proser M. (2005). Deserving the spotlight: Health centers provide high quality and cost-effective care. Journal ofAmbulatory Care Management, 28(4):321-330.22 Cunningham P. (2006). What accounts for differences in the use of hospital emergency departments across U.S.communities? Health Affairs 25: W324-W336.23 National Association of Community Health Centers (NACHC), The Robert Graham Center and Capital Link,2007. Access Granted: The Primary Care Payoff. (http://www.nachc.com/client/documents/issues-advocacy/policy-library/research-data/research-reports/Access_Granted_FULL_REPORT.pdf)

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Economic and Tax Effects at the State Level

Within this context, our quantitative analyses point to a significant WA CHC System economicimpact on the State of Washington. Table ES-1 below summarizes our state level economicimpact findings and demonstrates a total economic impact to Washington of $1.2 billion.

Table ES-1 – Summary of State –level WA CHC System Economic Impacts

Impact

State GDP(Billions ofDollars andMillions of

Jobs)

State HeathExpenditures

(Billions)

DirectExpenditures

(millions), LaborIncome (millions)

Employment(Jobs)

Direct WA CHCSystem

Expendituresas a Percent of

State Totals

Direct WA CHCSystem


State HealthExpenditures

TotalExpenditures

(millions),Labor Income

(millions)Employment

(Jobs)

Total Outputas a Percent

of StateTotals

Total WA CHCSystem Outputas a Percent of

State HealthCare

Expenditures

TotalEconomicMultiplier

(1) (2) (3) (4) (5) (6) (7) (8) (9)

EconomicOutput $292 $34 $683 0.23% 2.04% $1,207 0.41% 3.6% 1.77

LaborIncome $168 n/a $393 0.23% n/a $564 0.34% n/a 1.44

Employment(Jobs) 3.78 n/a 5,192 0.14% n/a 8,427 0.22% n/a 1.62

Source: Dobson | DaVanzo survey of Washington State Community Health Centers: Financial and Employment Impact calculatedusing IMPLAN Software.

Expenditures: In 2006, the WA CHC System direct expenditures were $683 million, orabout 0.23 percent of Washington State’s overall GDP of $292 billion, and about 2.04percent of Washington State’s total health care spending of $34 billion.

Overall economic impact: For every $1 of WA CHC System expenditures, the staterealizes $1.77 in total economic output. This overall economic multiplier of 1.77 meansthat the total WA CHC System economic impact is $1.21 billion or 0.41 percent of thetotal state GDP, and 3.6 percent of state health care spending.

Medicaid multiplier effect: For every $1 expenditure of state supported, federallymatched Medicaid by the WA CHC System, the state realizes $3.54 in total economicoutput. The implicit multiplier of 3.54 is an extremely powerful economic inducementfor the state to maintain, and, where possible, improve, CHC Medicaid reimbursement.

Direct labor income impact: For every $1 of WA CHC System spending on labor, thestate realizes $1.44 in labor income. The direct labor income impact of WA CHC Systemspending on labor in the state is $393 million, while the total labor income effect is $564million.

Job creation and impact: We calculate that the WA CHC System is responsible forapproximately 5,192 jobs, or about 0.14 percent of the Washington State total of about3.8 million jobs. For every one job created by the WA CHC System, 1.62 jobs are createdin the state. This employment multiplier of 1.62 produces a total WA CHC Systememployment (jobs) impact of 8,427 or about 0.22 percent of the state total.

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Table ES-2 below summarizes our state level tax impact findings.

Table ES-2 – Summary of State –level Tax Impacts

Federal State/Local Total*

Tax (in millions) $134,594,182 $40,993,175 $176,076,383

Source: Dobson | DaVanzo survey of Washington State Community Health Centers:Financial and Employment Impact calculated using IMPLAN Software.

*The slight difference between the sum of State/Local and Federal is due to CorporateEnterprise Taxes.

Tax impacts: WA CHC System economic activity produces, in total, approximately$176.1 million in total taxes including $41.0 million in state and local taxes, and $134.6million in federal taxes.

IMPLAN also indicates how employment and economic output of other industries areaffected by CHC spending. For instance, at the state level, CHC expenditures affect thefollowing industrial sectors: 1) retail trade; 2) accommodation and food services; 3)administrative and support services; 4) waste management and remediation; 5)professional, scientific and technical services; and 6) real estate and rental leasing.

Economic Effects at the County Level

WA CHC System spending has a significant impact on the Washington State economy,especially the health care sector. The WA CHC System economic impact appears particularlyimportant at the county level. Our analyses produced a series of detailed county level analysesshowing WA CHC System direct and total economic impact, labor income, employment (jobs),and tax effects.

Table ES-3 below summarizes the economic impact for counties in which the county WA CHCSystem’s total economic impact is greater than two percent of the county’s health care spending.

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Table ES-3 – Summary of Selected County-level Economic Effects

State orCounty

Direct WACHC SystemExpenditures

(millions)

Direct WACHC SystemExpendituresas a Percent

ofState/County

GDP

Direct WACHC SystemExpendituresas a Percent

ofState/County

HealthExpenditures

Total WACHC

SystemOutput

(millions)

Total WACHC SystemOutput as aPercent of

State/CountyGDP

Total WA CHCSystem

Output as aPercent of

State/CountyHealth Care

Expenditures

Adams $25 5.0% 43.3% $32 6.5% 56.7%

Benton $15 0.2% 2.3% $22 0.4% 3.3%

Chelan $26 1.0% 8.2% $39 1.5% 12.5%

Cowlitz $15 0.5% 4.0% $22 0.7% 5.8%

Ferry $0 0.4% 2.5% $1 0.4% 3.0%

Franklin $16 0.9% 8.3% $23 1.3% 11.8%

Grant $23 1.0% 8.3% $31 1.3% 10.9%

King $195 0.1% 1.5% $374 0.3% 2.8%

Kitsap $18 0.3% 1.4% $27 0.4% 2.1%

Klickitat $1 0.2% 1.7% $2 0.3% 2.1%

Lewis $6 0.3% 2.3% $9 0.4% 3.4%

Mason $5 0.5% 2.3% $6 0.6% 3.0%

Okanogan $10 1.0% 6.7% $14 1.4% 9.5%

Pend Oreille $2 0.6% 3.6% $2 0.7% 4.4%

Pierce $50 0.2% 1.4% $83 0.3% 2.3%

Skagit $10 0.2% 1.9% $15 0.4% 2.9%

Spokane $51 0.3% 2.7% $89 0.5% 4.6%

Stevens $10 1.2% 7.0% $13 1.7% 9.8%

Thurston $23 0.3% 2.0% $36 0.5% 3.1%

Walla Walla $6 0.4% 3.0% $9 0.5% 4.4%

Whatcom $16 0.2% 2.0% $26 0.4% 3.3%

Yakima $110 1.7% 12.7% $171 2.6% 19.7%

Washington $683 0.2% 2.0% $1,207 0.4% 3.6%

Source: Dobson | DaVanzo survey of Washington State Community Health Centers: Financial and Employment Impactcalculated using IMPLAN Software.

WA CHC System expenditures have obvious workforce implications for affected communitiesas WA CHC System employees serve as mentors to local clinical staff, attract complementaryclinical and professional staff into the county, and generally provide an environment conduciveto overall economic development. Improved population health resulting from the provision ofquality clinical care also bolsters the social fabric of the community, which then stabilizes andimproves community socio-demographics. Because most WA CHC System expenditure dollarscome from outside the local communities, the WA CHC System economic effects are extremelyimportant for the individual counties.

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Discussion and Conclusion

The economic contribution of the WA CHC System activities to local communities is importantfor a variety of reasons. The first reason concerns specific targeting and the intent of the WACHC system. We noted that WA CHC System expenditures are important to the communitiesbecause they improve the health status of low-income, medically underserved populations, oftenin rural areas, along with providing associated economic benefits to the communities. Theseimpacts are not likely to be replaced if CHCs are downsized or cease to exist.

Within this broader contextual framework, our analyses indicate that the WA CHC System directexpenditures and direct employment represent a visible portion of local economies, particularlyof local health care economies. The county-level analyses show that in many instances WACHC System expenditures represent a sizable portion of local health care spending. Thisspending makes it possible to attract clinical and professional workers to the county. In turn, thehighly-trained WA CHC System professional employees often serve as mentors to local staff.Furthermore, the WA CHC System spending enhances economic development as dollars remainwithin the CHC community.

The role of Medicaid deserves final mention. The federal government matches Washington Statespending on most Medicaid programs which means that for every dollar spent on federallymatched Medicaid health care services by Washington, the federal government also contributes adollar toward the Medicaid costs. When this match is added to the multiplier effect for the WACHC System it magnifies the impact of every state Medicaid dollar. As a result, for every $1expenditure of state supported, federally matched Medicaid by the WA CHC System, the staterealizes $3.54 in total economic output. The implicit multiplier of 3.54 is an extremely powerfuleconomic inducement for the state to maintain, and, where possible, improve, CHC Medicaidreimbursement.

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The Economic and Clinical Impact of CHCs in Washington State | Page 1

I. Introduction and Purpose

Community Health Centers (CHC) represent one of the Nation’s greatest public health “successstories”.24 CHCs provide health care homes 25 for vulnerable populations – i.e., those populations“at greater risk for poor health status and [reduced] health care access.”26 In addition, CHCs alsoserve as economic engines for their communities. From the very origin of the CHC program,both economic and clinical objectives have been recognized.

In the State of Washington, CHCs offer a health care home for the entire community: forindividuals who are insured through either public or private insurers and for those who areuninsured or under insured. As a result, Washington CHCs provide a health care home to nearlyone tenth of the state’s population, including nearly one third of the state’s uninsured. Thenumber of uninsured patients at health centers increased 42% since 2000”27 [through 2007]. TheCHCs’ focus on service to local populations also strengthens the social fabric and economicstability of Washington State communities. First launched in the 1960s, Washington CHCs havegrown to become the primary health care providers in Washington’s safety net.

Recent Congressional reauthorization of the Community Health Center (CHC) program throughFY2012 demonstrates widespread acknowledgement of the importance of CHCs in caring forMedicaid, uninsured, and medically vulnerable populations.28 Today CHCs serve over 17million patients in 6,300 sites across the country each year.29

CHCs provide high quality, cost effective, patient-centered care to vulnerable populations.Nationally, CHCs serve 1 in 8 Medicaid beneficiaries, almost 1 in 3 individuals in poverty, and 1in 5 low-income, uninsured persons. Nationally, two-thirds of health center patients aremembers of racial or ethnic minorities, which places CHCs at the center of the national effort toreduce racial disparities in health care.30 Because federal CHC grants target rural areas and

24 http://kennedy.senate.gov/newsroom/press_release.cfm?id=dfb7fc78-f1bf-4a70-8851-fbd6f9ee5ec125 Health care homes, also known as “medical homes”, are a “model of care delivery that includes an ongoingrelationship between a provider and patient, around-the-clock access to medical consultation, respect for a patient'scultural and religious beliefs, and a comprehensive approach to care and coordination of care through providers andcommunity services.” (The Association of American Medical Colleges.(http://www.aamc.org/newsroom/reporter/march08/medicalhome.htm)26 Shi L, Stevens GD. (2005) Vulnerability and unmet health care needs: The influence of multiple risk factors.Journal of General Internal Medicine, February 2005.27 2007 Snapshot: Washington’s Community Health Center System by Community Health Network of Washington(http://www.chnwa.org/PolicyAdvocacy/ResearchAndReports/WA%202007%20Fact%20Sheet%208%2012%2008%20(3).pdf)28 Health Centers Renewal Act of 2008. Senators Edward M. Kennedy and Orrin Hatch were the lead sponsors ofthe Senate bill.29 For the purposes of this report, the term “CHCs” is used to describe medical facilities that meet the requirementsof 330 of the Public Health Service Act (42 USCS § 254b). Facilities include recognized Federally Qualified HealthCenters (“FWHCs”) and facilities that meet the requirements for FQHCs (“look alikes”).30

Shi L. The Role of Health Centers in Improving Health Care Access, Quality, and Outcome for the Nation'sUninsured. Testimony at Energy and Commerce Committee, Subcommittee on Oversight and InvestigationsCongressional Hearing entitled “A Review of Community Health Centers: Issues and Opportunities.” Washington,DC. May 25, 2005.

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medically underserved areas with high unemployment and high poverty levels, CHCs’ impact onlocal area workforce and economic issues is well recognized and significant.

Dobson DaVanzo & Associates LLC (“Dobson | DaVanzo”) was commissioned by CommunityHealth Network of Washington in collaboration with the Washington Association of Communityand Migrant Health Centers to study the economic impact of CHCs within the State ofWashington, including estimating the economic, employment and tax effects of CHCs onWashington State and selected counties.

An important aspect of our work was to examine not only CHC expenditures but also county-level expenditures by Community Health Plan/Community Health Network of Washington(CHP/CHNW), a managed care plan and care delivery network created in 1992 by a group ofcommunity health centers across Washington State to improve access for vulnerable populationsto high quality, culturally competent care. The nonprofit mission of CHP/CHNW and the CHCshas allowed cost savings to be put back into local communities. In this report, we call thesecombined expenditures “Washington Community Health Center System” or “WA CHC System.”We use the acronym to refer to both the CHP/CHNW and CHC expenditures, and the acronym“CHC” to refer to only CHC care delivery and expenditures.

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II. Study Methodology

To complete this study, we engaged in three separate activities, each with its own methodology.

First, we conducted a literature review to understand the clinical contribution that CHCsmake in improving the health of their patients and the population of their communities.The literature also provides a qualitative understanding of how CHCs support communityeconomic developments.

Second, we developed a survey to collect primary data from selected CHCs acrossWashington State and CHP/CHNW in order to build a state and county-level database.

Third, we used an input-output model, specifically IMPLAN,31 to quantify the economicimpact that the WA CHC System makes both on the state and on counties.

IMPLAN is a type of applied economic analysis that tracks the interdependence among variousproducing and consuming sectors of an economy. More particularly, it measures the relationshipbetween a given set of demands for final goods and services (healthcare and/or insurancecoverage) and the inputs required to satisfy those demands. We chose to use IMPLAN in thisstudy because this modeling system is widely accepted, cost-effective, readily available to otherresearchers, and well suited to our study objectives.

Literature Search

Literature on the role of CHCs in the U.S. safety net is extensive, spanning developments incommunity-oriented primary care delivery, workforce development, and social change for over40 years. We focused our literature review on three key questions: 1) Do Washington StateCHCs treat the same populations as CHCs nationwide? 2) What is the evidence concerning thequality of care delivered by CHCs? and 3) What is the evidence concerning the cost-effectiveness of CHCs? It should be noted here that there appears to be notable similaritybetween Washington and national CHC patients. We conclude that national literature appears toaccurately inform an understanding of how CHCs in Washington State deliver care that isappropriate to geography, language, and cultural context.

The project team conducted a targeted literature review of published and unpublished articles,monographs, and reports identified through several sources. In order to perform a search of theliterature using PubMed, we first identified a set of keywords. Keywords included the following:“community health centers”; value; benefit; “social value”; “economic value”; advocacy, and“underserved populations.” From the first pull of the literature we conducted bibliographyreviews from related articles.

31 IMPLAN is an input-output economic modeling system produced by Minnesota IMPLAN Group, Inc. It is builtaround quantifying the interactions between industries (or sectors) within an economy. The system, comprised ofboth software and data files, is “used to create complete, extremely detailed Social Accounting Matrices andMultiplier Models of local economies.”(http://implan.com/index.php?option=com_content&task=blogcategory&id=83&Itemid=28)

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We then searched websites of various organizations, including the National Association ofCommunity Health Centers, American Public Health Association, National Association of PublicHospitals and Health Systems, and the Rural Health Research Center using the above keywords.Additionally, we searched government websites, including Health Resources and ServicesAdministration (HRSA) and its Bureau of Primary Health Care. Finally, we contacted theSchool of Public Health and Health Services at The George Washington University, well knownfor academic studies of CHCs, to gather additional studies that our search had not revealed.

Primary Data Collection and Analytic Plan

The project team collected two types of primary data for the study: 1) operational informationfrom the 24 CHCs across Washington State, and 2) similar information from CHP/CHNW.These data served as the inputs to the IMPLAN model.

CHC Data

As non-profit organizations, CHCs are required to file Form 990 tax returns with the InternalRevenue Service each year. Generally, a nonprofit organization is required to file its tax returnusing the same accounting method as it uses for its books (cash or accrual accounting method).

Our review of data from a sample of Washington CHCs indicated that 990s were filed usingexpenses determined by the accrual method of accounting. Review of materials and discussionwith IMPLAN representatives indicated that IMPLAN models economic impact usingexpenditures, conceptually closer to the cash based method of accounting.

To gather expenditure data, we surveyed the 24 Washington State CHCs that are members of theWashington Association of Community and Migrant Health Centers.32 In order to increaseresponse rate, we designed a streamlined survey instrument that required minimal inputs. Theinstrument was categorized into different segments, as outlined below:

1. Basic Info. This segment included respondent information (contact name, contacttelephone number, contact email address), organizational information (organization andfinancial period used in this response33), and fields for additional information (comment /question 1, comment / question 2, comment / question 3, comment / question 4, andcomment / question 5).

32 The Washington Association of Community and Migrant Health Centers (WACMHC) is a non-profitorganization, formed in 1985, to advocate on behalf of the low-income, uninsured and underserved populations ofWashington State served by community health centers. WACMHC’s mission is to promote health and humanservices for the underserved in Washington State; ensuring that all Washingtonians have access to primary healthcare, regardless of geographic location, nationality, income level or insurance status. A list of WACMHC’s 24member centers can be found at www.wacmhc.org/.33 Our ideal response was for a fiscal year that mirrored the 2006 calendar year (1/1/06-12/31/06), but we recognizedthat the completion of the survey for these dates might be burdensome for some organizations and might limit theresponse rate. Organizations were therefore given the option of reporting for an alternate period. Although we donot believe that alternate reporting period materially affects the response for a stable organization, this optionenabled us to evaluate the stability of the data.

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2. Patients. This segment collected the number of non-duplicated patients by payercategory (CHP-insured, non-CHP-insured, and non-insured) by clinic by county. Datacollected in this segment were used to allocate expenditures by county and by payercategory.

3. Expenditures. This segment collected the expenditures of six categories (health careservices, nursing and residential care facilities, social assistance, except child careservices, pharmacy, sponsorship, and other). We requested that CHCs allocate totalexpenditures by county. We also requested that CHCs allocate expenditures into specificcategories because IMPLAN utilizes different categories within its system. WashingtonCHCs provide different types of services that do not exactly correspond to IMPLANcategories. For example, many CHCs provide care delivered by both physicians andsocial workers which corresponds to categories of Health care services and socialassistance, except child care services. As these different categories have differenteconomic impacts, we chose to collect these types of categories to model the economicimpact as accurately as possible.

4. Auto-Allocation of Expenditures. In this segment, we automatically allocatedexpenditures using reported patient categories as a base. While the auto-allocation wasdesigned to reduce the respondents’ efforts, we requested that respondents review resultsand notify us of any needed adjustments.

5. FTEs & Compensation. In this segment, we collected the number of FTEs by county ofresidence and total compensation. We collected this data because IMPLAN can modeleconomic impact by FTEs and labor expenditures, in addition to expenditures. IMPLANresults from FTE modeling was used to confirm our findings from the expendituremodeling. We were also provided with employment data for 2006. Data included eachemployee’s residential ZIP+4 code, date of hire, date of termination, and rate ofcompensation.

Returned surveys were first reviewed for questions/comments that respondents identified in theBasic Info segment. We then reviewed financial period indicated in the response. We contactedrespondents with questions by email and adjusted data as necessary.

We received survey responses from 23 of the 24 CHCs in Washington State. For the non-responding CHC, we drafted a survey response using the publicly available 990 tax form for the2006 period. Staff at the CHC indicated these data appeared to be accurate.

CHP/CHNW Data

CHP is a statutory health plan operating under a Certificate of Authority granted by theInsurance Commissioner of the State of Washington. CHNW is the provider delivery systemwhich includes most of the CHCs in the state and other non-CHC providers. CHP/CHNWfunctions include issuing (1) capitation payments to contracted CHCs and other providers forenrollees, (2) non-capitation payments to hospitals, specialists, and other providers, (3) paymentsfor prescribed pharmaceuticals, and (4) payments for quality improvement programs and grants.

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Similar to our survey efforts with CHCs, we worked with CHP/CHNW to gather its expendituresin calendar year 2006. Data reported to us included expenditures for (1) capitation payments toCHCs and other providers, (2) hospital services, (3) physician specialists and other medicalservice providers, (4) pharmaceuticals, (5) administrative costs, and (6) quality improvementinitiatives. Data were reported in the aggregate and allocated by county and State levels.

Analytic Plan

We first created a uniform database from all of the data that had been submitted. Summarizeddata from the database were then input into the IMPLAN software. Data were entered byprovider at both the county and state levels. This input method allowed us the maximumflexibility in conducting analyses.

Output from IMPLAN yielded larger multipliers at the state level than at the county level. Suchresults were expected because the impact of expenditures is realized at the local (county) levelfirst and, subsequently, ripples throughout the state.34 For this reason entering the data at theprovider level and then summing the output does not fully capture the impact of the WA CHCSystem activities in Washington State.

We then used the IMPLAN output to construct a database of the economic impacts at the countyand state levels. This database contains all data on direct, indirect, induced, and total economicactivity by the categories of employment, taxation, output, and value added. We also includeddata on poverty, unemployment, population density and total household income in our database.

Next, we constructed tables from which we derived our preliminary impact assessments. Thefindings from these tables supported our hypothesis that WA CHC System activity wouldgenerate significant economic activity in Washington State and its counties.

Modeling Economic Impact of CHCs

Our analyses with IMPLAN enabled us to estimate the multiplier effects of changes in finaldemand for one industry, the WA CHC System, on all other industries within a local economicarea, in this case the counties and State of Washington. Multipliers were estimated for the entirestate and all the counties in which the WA CHC System has economic activity. Thesemultipliers produced measures of total change in output, income, and employment. Value-addedcalculations representing state and county gross domestic product were also calculated. Finally,tax effects were estimated. The survey data that had been submitted by WA CHC System entitiesgave us the necessary dollar value and full time employee inputs to complete our analysis.35

We present the definitions of key IMPLAN components as applied to this study below:

34 Similarly, the impact of expenditures across the entire United States is greater than the impact of WashingtonState alone.35 IMPLAN representatives are readily available to respond to technical and qualitative questions. We receivedtechnical assistance as needed from IMPLAN staff.

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Total economic effects are the combined effect or sum of WA CHC System direct, indirect, andinduced effects.

Direct effect is the initial change in revenue, earnings, and employment (jobs) for theWA CHC System.

Indirect effect is a change in inter-industry transactions, as supplying industriesrespond to the direct effects of the WA CHC System.

Induced effect is the change in downstream household spending caused by the directand indirect effects on household income.

Multipliers calculated by IMPLAN show the relationship between the direct effect and the totaleconomic effect. The direct effect times the multiplier produces the total economic effect.

Tax effects represent state and local, as well as federal taxes on the total economic effect

Additionally, in order to calibrate our IMPLAN model results, we entered the submitted WACHC System expenditure and employment (jobs) data into different IMPLAN industrial sectors.These sectors are based on the North American Industrial Classification Sytem (NAICS)categories. NAICS is the standard used by federal statistical agencies in classifying businessestablishments for the purposes of collecting, analyzing, and publishing statistical data related tothe U.S. business economy. NAICS recognizes the different economic situations and outcomesthat affect each sector of the overall economy.

Sectors we selected were used in consultation with health professionals in Washington State andIMPLAN. IMPLAN sectors that we used are as follows:

406 – Health and Personal Care Stores (we labeled this sector as “Pharmacy” in oursurvey);

427 – Insurance Carriers (we labeled this sector as “Sponsorship” in our survey); 465 – Office of Physicians, Dentists, and Other (we labeled this sector as “Health care

services” in our survey); 467 – Hospitals (this sector was not included in our survey of CHCs, but was included in

our survey of CHP/CHNW); 468 – Nursing and Other Residential Care (we labeled this sector as “Nursing and

residential care facilities” in our survey); 470 – Social Assistance Except Child Care (we labeled this sector as “Social assistance,

except child care services” in our survey; and 12001 – Local Government, Non-Education (this sector was not included in our survey

but used in our analyses because IMPLAN considers government-operated hospitals topart of government).

After partitioning our expenditure and employment (jobs) data into these sectors, we usedIMPLAN output to construct a database of impacts for each entity at the county and state levels.This data contains all data on direct, indirect, and induced activity by the categories of economic

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output, labor income, employment, taxation, and value added. We also included data on poverty,unemployment, population density, and total household income in our database.

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III. The CHC Role in the Safety Net

Background

In this section, we document the nature and extent of the contribution made by CHCs to thehealth care safety net, and to Washington State specifically. We present a brief history of CHCs,the legislative mandate for CHCs and how the CHCs’ legislative mandate limits their ability toreduce costs in economic downturns. We also discuss CHCs’ mission to provide comprehensivecare under one roof in order to support key health care goals and provide collective value to thecommunity.

History of CHCs

The CHC program began in 1965 as a two-site demonstration project for “neighborhood healthcenters,” Columbia Point in Boston and the Tufts-Delta Health Center in Mississippi. Thecharge of the demonstration project was to address the severe health needs of individuals livingin poverty. The Office of Economic Opportunity (OEO), the agency charged with implementingthe “war on poverty,” had a guiding principle of community empowerment as well as programparticipation. Tufts Medical School proposed the CHC model to OEO, as a test of the hypothesisthat a health program, in addition to its role in treating and preventing disease, could also be avehicle for community development and economic growth. Hence, from its inception the CHCprogram has had a dual purpose of delivering clinical services and supporting economicdevelopment.

The Tufts-Delta Health Center was created to serve approximately 14,000 mostly AfricanAmerican residents of an impoverished 500 square mile area in Mississippi. The Tufts-DeltaHealth Center programs contributed to the local community in much broader ways beyond theprovision of personal health care and health education. The programs, run by local resident staff,touched housing, water supplies, sanitation, and most importantly, linked the community withuniversities, medical schools, foundations and agencies. Health center programs served as sitesfor interns of medical schools, nursing schools, social work schools, and schools of public health,bringing knowledge, skills, and resources into the local area all directed at improving thecommunity infrastructure.36

The health center formed an education council, and in the evening, health center staff workedwith promising young people in the community to help them apply to colleges and professionalschools. During the first ten years, this effort produced seven MDs, five PhDs in health orientedareas, three environmental engineers, two psychologists, and numerous nurses and socialworkers.37 Local residents who were employed at the health center tended to spend their earnings

36 Geiger HJ. (1972) A health center in Mississippi: a case study in social medicine. In: Corey L, Saltman SE,Epstein MF, eds. Medicine in a Changing Society. St. Louis, MO: CV Mosby Co.: 157-167.37 Geiger HJ. (1982) The meaning of community-oriented primary care in the American context. In: Connor E,Mullan F, eds. Community Oriented Primary Care. Washington DC: National Academy Press: 73-114.

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The Economic and Clinical Impact of CHCs

on better housing and college education for their children thus improving the local workforceand, in turn, the economy.38

Other CHCs that were established during this time also invested in their communities makingenvironmental improvements, and also developing links to other organizations. Services wereprovided at no or nominal charge to the patient. The United Farm Workers Union started CHCprograms to serve mainly Latinos. Other health initiatives led to the creation of CHCs, withfunds not only from OEO, but also the Model Cities Programs, Department of Health, Educationand Welfare, and the National Health Services Corps. By the 1970s, there were over 1,000 CHCsserving patients.39 Such rapid growth indicates both demand for services offered by CHCs andacceptance by multiple elements of society, because CHCs have the ability to provide servicesthat are not only broader and far reaching, but also specifically tailored to their localcommunities.

The first CHCs in Washington were launched in the late 1960s and early 1970s in two areas ofthe state. Carolyn Downs Family Medical Center, Country Doctor Community Clinic, 45th StreetClinic, and Georgetown Medical and Dental Clinics arose in Seattle, and in the Yakima ValleyFarm Workers Clinic in the Yakima area.

Legislative Mandate for CHCs HindersCHCs’ Ability to Counter EconomicDownturns

Since 1965, CHCs have become the largest primary careprovider in the U.S. Over the last forty years, the numberand scope of CHCs have grown and evolved beyond theirinitial charge, to the point that they have become integralcommunity resources.

Although individual CHCs focus on local communities,federal law governs many aspects of CHC operations.40

Federal law defines a CHC and stipulates who must beserved, what care must be provided, and how the CHC mustbe governed. For example, aside from emergencydepartments under EMTALA, CHCs are the only providersthat are required to see all patients, regardless of theirability to pay. All CHCs nationally, including those inWashington, are governed by specific mandates which include th

38 Geiger HJ. (2002) Community oriented primary care: a path to communityPublic Health, 92(11):1713-1716.39 Waitzkin H. (2005) Commentary – The history and contradictions of the heResearch, 40(3):941-952.40 All CHCs in Washington State are subject to these rules.

Under Section 330 of thePublic Health Service Act(42 USCS § 254b), CHCsmust:

…serve populations in need. …provide a full range of

basic health services. …provide additional

ancillary and supportiveservices.

…provide services tounderserved populations.

…provide services withoutconsideration of payment.

…be governed byconstituent members.

…meet numerous other

in Washington State | Page 10

e following:

development. American Journal of

alth care safety net. Health Services

requirements.

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Washington CHCs must … serve populations in need.

Technically, a CHC is defined by law (Section 330 of the Public Health Service Act (42 USCS §254b)) as follows:

“[A]n entity that serves a population that is medically underserved, or a specialmedically underserved population comprised of migratory and seasonal agriculturalworkers, the homeless, and residents of public housing, by providing, either throughthe staff and supporting resources of the center or through contracts or cooperativearrangements … required primary health services”41

Washington CHCs must … provide a full range of basic health services.

Section 330 is specific about the basic health services that are required. These services, whichcomprise a “best in class” model of primary care provision, include the following:

Health services related to family medicine, internal medicine, pediatrics, obstetrics, orgynecology;

Diagnostic laboratory and radiologicservices;

Preventive health services; Emergency medical services; and Pharmaceutical services.42

Washington CHCs must … provideadditional supporting services.

Section 330 of the Public Health Service Actalso requires supportive or enabling services tobe provided. These are services that facilitateindividuals’ access to health center services,such as transportation. Supporting servicesinclude:

Referrals to providers of medicalservices;

Patient case management services(including counseling, referral, andfollow-up services);

Services that enable individuals to use the services of the health center (includingoutreach and transportation services and, if a substantial number of the individuals in thepopulation served by a center are of limited English-speaking ability, the services of

41 See Appendix A for Section 330 of the Public Health Service Act (42 USCS § 254b).42 Paraphrase of 42 USCS § 254b.

Integrating Mental and BehavioralHealth Services

Columbia Valley Community Health(CVCH) has a special interest in the

provision of behavioral health servicesrecognizing the higher prevalence of

behavioral health issues in patients livingin poverty. Given this need, CVCHentered into a contract with the localRegional Support Network to provide

specialty mental health services for adultsand children.

By bringing these community mentalhealth services under the auspices of acommunity health center, more dollarshave been allocated to direct servicedelivery as opposed to administrative

costs.

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appropriate personnel fluent in the language spoken by a predominant number of suchindividuals); and

Education of patients and the general population served by the health center regarding theavailability and proper use of health services.43

Washington CHCs must … provide a range of ancillary services.

Section 330 of the Public Health Service Act further identifies “additional health services … thatare appropriate to meet the health needs of the population served by the health center.” Theseadditional health services include the following:

Behavioral and mental health andsubstance abuse services;

Recuperative care services; Environmental health services; and Screening for and control of infectious

diseases and injury prevention programs.44

Washington CHCs must … provide servicesto underserved populations.

According to Section 330, the “term ‘medicallyunderserved population’ means the populationof an urban or rural area designated by theSecretary as an area with a shortage of personal health services or a population group designatedby the Secretary as having a shortage of such services.”45 Populations specifically mentioned inthe law include:

Infants; Migratory and seasonal agricultural workers; Homeless individuals; Residents of public housing; and Individuals with limited English proficiency.

Washington CHCs must … provide serviceswithout consideration of payment.

CHCs assure that no patient will be denied health care services due to an individual's inability topay. This is the key reason for the prominence of CHCs within the U.S. safety net.

43 Paraphrase of 42 USCS § 254b. Emphasis added44 Paraphrase of 42 USCS § 254b.45 42 USCS § 254b

Neighborhood Connections

Yakima Neighborhood Health Servicesactively seeks to provide homeless

individuals with basic health care needs.Unique to Neighborhood Connections isthe outreach component and relationshipbuilding between individual patients andhealth care providers. In a given year,over 1,700 individuals will be provided

care in roughly 5,300 encounters.

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While CHCs are required to “make every reasonable effort to collect appropriate reimbursementfor its costs,” fees must be “consistent with locally prevailing rates.”46 Further CHCs arerequired to develop a schedule of discounts to be applied to the payment of such fees adjusted onthe basis of the patient's ability to pay.

Washington CHCs must … be governed by constituent members.

CHCs are required to develop boards that are composed of individuals, a majority of whom arebeing served by the center and who, as a group, represent the individuals being served by thecenter.

Boards must “meet at least once a month, select the services to be provided by the center,schedule the hours during which such services will be provided, approve the center's annualbudget, approve the selection of a director for the center, and … establish general policies for thecenter.”47

Washington CHCs must … meet numerous other requirements.

In addition to the above mandates, and in sharp contrast to other primary medical practices in atypical market, CHCs are required to:

Establish and maintain collaborative relationships with other health care providers in thearea;

Develop and consistently support a quality improvement system that includes clinicalservices and management, and maintains the confidentiality of patient records;

Use statutorily prescribed accounting procedures as determined by the Secretary; Contract with the state for Medicaid patients; Provide services in the language and cultural context of patients; Provide multilingual staff to meet the needs of its patients; Develop and maintain ongoing referral relationships with one or more hospitals, and; Encourage persons receiving or seeking health services from the center to participate in

any public or private (including employer-offered) health programs or plans for which thepersons are eligible.48

Mission of CHCs

Nationally and in Washington, CHCs execute the common mission of providing comprehensivehealth care under one roof. This “one stop shop” approach allows the CHCs to more easilyengage in quality improvement initiatives, take a "team approach" to patient care, and makeservices convenient and patient-centered. In Washington State, CHCs provide a comprehensivearray of services, including medical, dental, and behavioral health care, as well as a large number

46 42 USCS § 254b47 Paraphrase of 42 USCS § 254b.48 Paraphrase of 42 USCS § 254b.

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of enabling services (such as language translation). Such a comprehensive approach to healthcare service delivery has been shown to yield superior clinical outcomes, improved screeningrates, and reduced health care disparities among CHC patients.49,50

Numerous independent experts have found CHCs’ quality of care to be as good as or better thanthe quality of other primary care providers.51,52 By serving as health care homes for vulnerablepatients, CHCs create an efficient and comprehensive health care system for populationsotherwise known for facing barriers in accessing careand inconsistent health seeking behaviors resulting inthe use of costly services.

The CHC system is comprised of independent andinterdependent organizations of various sizes thatprovide customized ranges of services targeted to thespecific needs of their unique communities. CHCsprovide at least basic health care services and sharethe goal of improving the health of communitymembers. CHC missions are aligned with those of theU.S. Department of Health and Human Services(DHHS).53 The first goal of the DHHS Healthy People2010 initiative is to help individuals of all ages toincrease life expectancy and improve their quality oflife.

These goals are also consistent with the 2006 findingsof Washington’s Blue Ribbon Commission on HealthCare Costs and Access. This Commission was co-chaired by Governor Christine Gregoire anddrew its membership from key state Legislators and agency leadership. The Commission wascharged with “delivering a five-year plan for substantially improving access to affordable healthcare for all Washingtonians.” Their goals included: access for all Washingtonians to effectivehealth coverage by 2012, and all children by 2010; increasing health outcomes and the use ofevidence based care; reducing health disparities; and limiting the increase in total health carespending to the rate of personal income growth.54

In subsequent years, the Governor and Legislature have worked to meet these goals throughseveral key initiatives and funding commitments. Each of the following legislative efforts is

49 Frick KD and Regan J. (2001) Whether and where community health centers users obtain screening services.Journal of Healthcare for the Poor and Underserved 12(4): 429-45. 25(6):1713-1723.50 Proser M. (2005) Deserving the spotlight: Health centers provide high-quality and cost-effective care. Journal ofAmbulatory Care Management 28(4):321-330.51 Hicks LS, et al. (2006) The quality of chronic disease care in U.S. Community Health Centers. Health Affairs52 Chin MH, et al. (2000). Quality of diabetes care in Community Health Centers. American Journal of PublicHealth 90(3): 431-4.53 The second goal of Health People 2010 is “Eliminate health disparities.” CHCs have been instrumental inachieving this public health goal.54The full Blue Ribbon Commission report can be accessed at www.leg.wa.gov/Joint/Committees/HCCA .

CHCs share a commonmission, aligned with FederalGovernment and Washington

State goals of increasingquality and years of

healthy life.

By serving as health carehomes for vulnerable patients,

CHCs have been able tocreate an efficienthealth care system.

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integral to CHCs’ ability to meet their mission of providing a health care home for underservedand uninsured children and adults in Washington.

Cover All Kids by 2010: Understanding that no child should go without health care, thestate passed historic legislation in 2007 to cover all of Washington’s children by 2010.55

Since the Governor took office, an additional 84,000 children have received public healthinsurance because of program expansions and the reduction of administrative hurdles.56

The state continues work to simplify administrative issues and increase outreach to findremaining uninsured children. As the health care home for half the state’s uninsuredchildren, CHCs are actively participating in outreach and enrollment efforts.57

Adult Access to Health Insurance Coverage: The state has also recognized theimportance of providing an affordable health insurance option for low-income uninsuredadults in Washington by investing in a subsidized commercial insurance program calledBasic Health. This program provides outpatient, hospital, emergency, pharmacy,specialty and limited mental health benefits. Enrollees share responsibility for theirhealth care costs, paying copayments, premiums, and deductibles, with the statesubsidizing remaining costs based on a sliding scale. The Legislature has added fundingfor 7,000 additional Basic Health slots since 2006, resulting in the program beingcurrently funded for 107,000 members statewide.58

Commitment to Caring for the Uninsured: As Basic Health enrollment is limited bybudget allocation, the state continues to invest essential funds in a grant program to offsetthe cost of caring for the uninsured. Since 1985, the state has invested in the CommunityHealth Services (CHS) Program which disburses grants to CHCs and other safety netproviders to provide health care for Washington’s growing uninsured population. In2007, CHS awarded grants to 36 organizations with 222 delivery sites that served263,728 uninsured individuals.59

Addressing the Primary Care Provider Shortage: Access to health care for childrenand adults is threatened by the growing shortage of primary care providers in WashingtonState. The shortage is particularly severe for CHCs and other practices that provide careto rural areas and underserved urban populations. In 2008, the state took an additionalstep in addressing the shortage by expanding the Health Professional Loan Repayment

55 Washington State 60th Legislature, 2007 Regular Session. Chapter 5, Laws of 2007.56 Information on increases in children’s enrollment in Medicaid is available atfortress.wa.gov/dshs/maa/News/EnrollmentFigures/ChildrensEnrollmentinDSHSMedicalAssistancePrograms.xls .57 2007 Snapshot: Washington’s Community Health Center System by Community Health Network of Washington(http://www.chnwa.org/PolicyAdvocacy/ResearchAndReports/WA%202007%20Fact%20Sheet%208%2012%2008%20(3).pdf)58 Basic Health, administered by the Washington State Health Care Authority, is a program for uninsuredWashington adults. To be eligible adults must have incomes up to 200% of the federal poverty level and beineligible for a Medicaid program. More information on eligibility, administration, application information and achronology for expansion can be found at http://www.basichealth.hca.wa.gov.59 The Community Health Services grant program is administered by the Washington State Health Care Authority.Information on the mission, clinics receiving grants, and annual statistics can be found atwww.chs.hca.wa.gov/mission.html .

Dobson | DaVanzo


and Scholarship program to ensure that more providers serve in the areas of greatestneed.60

Together these measures contribute to Washington maintaining a lower rate of uninsuredresidents than the U.S. as a whole. Table 1 below shows the current sources of health insurancecoverage in Washington State, compared to the U.S.

Table 1: Washington State Sources of Health Insurance Coverage

Washington StatePopulation

Washington StatePercentage

United StatesNumber

United StatesPercentage

Employer 3,636,450 57% 159,311,384 53%Individual 328,871 5% 14,541,782 5%Medicaid 800,480 13% 39,296,423 13%Medicare 717,922 11% 36,155,452 12%Other Public 134,592 2% 3,253,122 1%Uninsured 741,450 12% 45,657,193 15%Total 6,359,764 100% 298,215,356 100%Individual 328,871 5% 14,541,782 5%

Source: Kaiser Family Foundation: State Health Facts61

Washington CHCs play a key role in meeting these state health care goals. Growth indemand for CHC services is likely to increase in future years because of anticipatedchanges in Medicaid eligibility rules, the rising cost of private insurance, and theprojected expansion of the CHC sites available nationally as part of the 2002 FederalHealth Center Growth Initiative.62

The WA CHC System Adds Collective Value in Local Communities

Nationally and in Washington, CHCs play a unique and valuable role in the health care safetynet. We define the health care safety net as those organizations and programs, in both the publicand private sectors, with a legal obligation or a commitment to provide direct health care servicesto uninsured and underinsured populations.

In addition to being an important source of primary and preventive care, WashingtonCHCs create and convey community benefit in a variety of ways. CHCs produce goodsand services and serve as anchors for attracting new businesses and investments. CHCsare employers. For example, Washington State CHCs employ approximately 200 FTEfamily practice physicians, as well as approximately 165 advanced registered nurse

60 The Health Professional Loan Repayment and Scholarship program is administered jointly by the WashingtonState Department of Health and the Washington Higher Education Coordinating Board. More information oneligibility for providers and sites and more program information is available atwww.hecb.wa.gov/paying/waaidprgm/health.asp.61 http://www.statehealthfacts.org/profileind.jsp?ind=125&cat=3&rgn=4962 Hicks LS, et al. (2006) The quality of chronic disease care in U.S. Community Health Centers. Health Affairs.

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practitioners and physician assistants.63 CHCs provide basic on-the-job training andmentoring for entry level workers and community residents, and provide a valuablecareer ladder.64

For example, CHCs may train entry level workers (e.g. receptionists and front-officestaff) to assume progressively more responsibility, as these entry level employeesprogress to more complex job responsibilities as, for example, a medical assistant or anoutreach worker. Consistent with their patient demands and their dedication to culturalcompetence, CHCs hire a diverse workforce with language skills to specifically addresstheir unique patient mix. In addition to employment opportunities, the education thatclinics provide helps some workers later to enter professional schools of medicine,nursing, and allied health-care disciplines.65 CHCs hire from the community to serve thecommunity.

Washington CHCs enhance thecollective value of health care servicesby allowing providers to integratemedical, dental, and behavioral care.Rather than competing with otherproviders, CHCs complement localproviders as they fulfill their role asprimary and preventive health careproviders for underserved populations.Additionally, several CHCs inWashington State have establishedmedical and dental residencyprograms and other professional training opportunities. These training programs multiplyaccess to health care services and help the CHCs retain qualified and dedicatedprofessional staff.

The WA CHC System demonstrates that “the whole is bigger than the sum of its parts”.WA CHC System expenditures for healthcare services, salaries, and operating costs alongwith cost savings are continually reinvested in Washington’s local communities, incontrast to health care insurers and other for-profit providers that could have obligationsto shareholders or other obligations out-of-state.

In addition to the CHCs, the WA CHC System includes Community Health Plan and theCommunity Health Network of Washington (CHP/CHNW). Community Health Plan (CHP) wascreated in 1992 by a group of CHCs across Washington State that believed traditional healthplans were not meeting the needs of their patients. CHP’s mission is to deliver accessible

63 Skubi D. (2007), Community Health Centers – Growing from movement to mainstream. Washington HealthcareNews, 2(10): 1-6.64 Hunt JW. Community health centers’ impact on the political and economic environment: The Massachusettsexample. (2005) Journal of Ambulatory Care Management, 28(4): 340-347.65 Waitzkin H. (2005) Commentary—The history and contradictions of the health care safety net. Health ServicesResearch, 40(2): June 2005.

Kitsap Partnership forAccess to Health Care Services

Peninsula Community Health Services(PCHS) launched this program to integrate

the disciplines of behavioral health andphysical health. PCHS reports increasedproductivity, better acculturation betweendisciplines, and enhanced patient comfort

with their health care home.

Dobson | DaVanzo


managed care services which meet the needs and improve the health of their communities andmake managed care participation beneficial for community responsive providers. The healthplan’s collaboration with its CHC-based delivery system gives it the ability to address the healthneeds of the communities it serves.

For example, CHP ranked first among Medicaid health plans in the state in children’s’immunizations, demonstrating an elevated quality of care provided by a CHC-based deliverysystem.66 CHCs also helped CHP achieve an 80% generic prescribing rate for its Medicaidmanaged care patients during the first six months of 2007.67 This practice gets patients themedication they need, while greatly reducing a key driver of unnecessary costs.

In 2008, CHP provides coverage for over 228,000 people in 33 Washington counties who areenrolled in Basic Health, Healthy Options,State Children’s Health Insurance Program(SCHIP), Medicare Advantage, and theGeneral Assistance Unemployable (GA-U)program. CHP is the sixth largest healthprogram in Washington (commercial or non-profit). Members receive services via theCommunity Health Network of Washington(CHNW) provider community which iscomprised of more than 1,600 primary careproviders and 8,000 specialists at more than300 primary care sites and over 90 hospitals.

WA CHC System is a statewide,comprehensive delivery system of primarycare providers who are dedicated to the mission, and who focus on treating the entire person,providing translation, transportation, dental, and mental health in addition to primary,preventative care. Within the WA CHC System, CHP/CHNW maintains a focus on activelymanaging the care of its members. For example, CHP is below the Medicaid National andPacific region averages for total inpatient average length of stay as well as total inpatient daysper 1,000.68

The WA CHC System includes providers in 33 of the 39 counties as detailed in the map on thefollowing page.

66 Internal Review Document from Community Health Plan.67 Internal Review Document from Community Health Plan. January to June 2007 generic prescribing rate formanaged Medicaid patients was 80.8%.68 http://www.ncqa.org/tabid/836/Default.aspx

Data Integration Pilot

CHNW is piloting an automated transfer ofimmunization data between two CHCs that

use different Electronic Medical Recordsystems and the Washington state

Department of Health Child ProfileImmunization registry. Based on OpenSource software available to anyone for

free, the pilot improves clinical quality andefficiency, while also creating

interoperability between disparate medicalrecord systems.

Dobson | DaVanzo

Map of WA CHC System Provider Locations

We received survey and other data from the following 24 CHCs: Columbia Basin Health Association Columbia Valley Community Health Community Health Association of Spokane Community Health Care Community Health Center La Clinica Community Health Center of Snohomish County Community Health of Central Washington Country Doctor Community Health Centers Cowlitz Family Health Center Family Health Centers HealthPoint Interfaith Community Health Center

International Community Health Services Metropolitan Development Council Healthcare for the Homeless Moses Lake Community Health Centers N.E. Washington Health Programs Neighborcare Health Peninsula Community Health Services Sea Mar Community Health Centers Seattle Indian Health Board The NATIVE Project Valley View Health Center Yakima Neighborhood Health Services Yakima Valley Farm Workers Clinic


We very much appreciate all assistance that these organizations provided to us.

Dobson | DaVanzo


Findings from the Literature Review

Literature describing the role of CHCs in the U.S. safety net is extensive, and includesdevelopments in community-oriented primary care delivery, workforce development, and socialchange over a period of 43 years. Our literature review focused on three principal questions: 1)Do Washington State CHCs treat the same populations as CHCs nationwide? 2) What is theevidence concerning the quality of care delivered by CHCs? and 3) What is the evidenceconcerning the cost-effectiveness of CHCs?

Populations Served by CHCs in Washington State Reflect National Norms

Due to the similarity between how Washington State CHCs and CHCs nationally target theirhealth care delivery on specific populations in medically underserved areas, the nationalliterature provides us with an understanding of how CHCs in Washington State deliver care thatis appropriate to geography, language, and cultural context. Thus, our literature review findingsgenerally apply to Washington State CHC missions and clinical impacts on populations orunderserved areas.

In 2007, Washington State CHCs served 594,763 patients, providing 2,330,551encounters. Over 90 percent of CHC patients were at 200 percent or less of the FederalPoverty Level,69 with 30 percent being best served in a language other than English.Washington CHCs delivered approximately $25million enabling services, including casemanagement, outreach, translation/interpretation, andeligibility assistance.70

Comparing the age profile of Washington State CHCpatients to clinic patients nationwide, we found ingeneral that Washington State CHCs serve slightlyfewer patients aged 45 and above than the nationalaverages, and slightly more patients under age 45.Washington CHCs serve more children aged 6 to 10(8.8 percent vs. 7.9 percent nationwide), and moreadults aged 25 to 29 (8.8 percent vs. 7.9 nationwide).Overall, however, the age distribution of WashingtonState patients is close to the distribution of patients inCHCs across the Nation. See Exhibit 1 below.

69 For instance, in 2008, the poverty threshold is $10,400 for a single person, $14,000 for a household of twopersons, and $21,200 for a household of four persons. (Federal Register, Vol 73, No 15, January 23, 2008.70 http://bphc.hrsa.gov/uds/2007data/washington/table8b.htm

In 2007, of Washington CHCpatients …

more than 54.5% weremembers of racial or ethnicminority groups,

approximately 29.9% arebest served in a languageother than English,

32.9% were uninsured, and

93.5% had family incomesbelow twice the FPL.

Dobson | DaVanzo


Exhibit 1: Age Cohorts of CHC Patients in 2006 –National and Washington State

3.7%

10.4%

7.9% 8.0%8.2%

6.6%

7.7%

6.7%6.5%

6.8% 6.6%

5.8%

4.6%

3.5%

2.5%

1.7%1.3%

0.9% 0.7%

3.6%

10.6%

8.8%

8.0%

7.6%

6.9%

8.6%

7.5%7.2%

6.9%

6.5%

5.6%

4.2%

3.0%

2.0%

1.3%0.9%

0.5% 0.4%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%U

nd

er

Age

1

Age

s1

-5

Age

s6

-1

0

Age

s1

1-

15

Age

s1

6-

20

Age

s2

1-

24

Age

s2

5-

29

Age

s3

0-

34

Age

s3

5-

39

Age

s4

0-

44

Age

s4

5-

49

Age

s5

0-

54

Age

s5

5-

59

Age

s6

0-

64

Age

s6

5-

69

Age

s7

0-

74

Age

s7

5-

79

Age

s8

0-

84

Age

s8

5an

do

ver

National

Washington State

Source: Dobson DaVanzo analysis of 2006 UDS Data

Dobson | DaVanzo


Washington State CHCs patients are more likely to be insured by Medicaid or another public payer, less likely to be insured byMedicare and private payers, and are less likely to be uninsured than nationally. See Exhibit 2 below.

Exhibit 2: Principal Third Party Insurance in 2006 –National and Washington State

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

None / Uninsured Medicaid Medicare Other Public Private

National

Washington


Dobson | DaVanzo


Washington State CHC patients are more likely to be Asian and Pacific Islander, Native American, Hispanic/Latino and White thannationally, and less likely to be African American. Additionally, more Washington State CHC patients are likely to be better served ina language other than English than nationally. See Exhibit 3 below.

Exhibit 3: CHC Patients by Race/Ethnicity/Language in 2006 –National and Washington State

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

50.0%

Asian NativeHawaiin

Other PacificIslander

Black/AfricanAmerican

AmericanIndian / Alaska

Native

White (notHispanic or

Latino)

Hispanic orLatino (all

races)

Patients bestserved in alanguage

other thanEnglish

National Percent of Known

Washington Percent of Known


Dobson | DaVanzo


CHCs in Washington State Deliver Care that is Appropriate to Geography,Language, and is Culturally Competent.

There are 172 medically underserved areas or populations across 33 counties inWashington State. Washington CHCs have responded to the geographic need with 177centers across the state.71 In some rural counties, the CHC is a major, if not the only,provider of primary care.

Generally located in urban or rural areas that previously lacked services and/or provider capacity,CHCs create health care service access. Geographic areas that face shortages of health workersand facilities tend to be the same areas that are most depressed economically. In turn, thiseconomic reality aggravates workforce shortages, incenting fewer physicians to locate in thesemedically underserved areas.72

CHC patients include some of the highest risk populations in the nation, includingmigrant farm workers and homeless persons. These patients have been described as“significantly poorer, in significantly worse health, and … more likely to be members ofracial and ethnic minority groups” than patients of other providers.” 73,74 CHC patientsare among the most vulnerable populations. That means even if these individuals wereinsured, they would remain isolated from more traditional forms of care because of“where they live, who they are, the language they speak, and their higher levels ofcomplex health care needs.”75

All CHCs charge fees on a sliding scale for uninsured clients with income at or below 200%FPL. The clinics seek external funding to supplement payments from patients, so that financialbarriers do not prevent patients from continuing to seek needed care. Clinics are not able to turnaway patients who are unable to pay, even though this policy creates continuing challenges tofinancial stability.76,77

CHCs often represent the sole professional health care option available to some patients for basiccare, providing services often unavailable or more difficult to obtain through private health careproviders. At the most basic level, the lack of other professional health services may be due to

71 Source: http://findahealthcenter.hrsa.gov/Search.aspx72 Expanding Care Versus Expanding Coverage: How To Improve Access To Care by Peter Cunningham and JackHadley in Health Affairs, July/August 200473 Dor A, Pylypchuck Y, Shin P, Rosenbaum S. (2008) Uninsured and Medicaid Patients’ Access to PreventiveCare: Comparison of Health Centers and Other Primary Care Providers. Research Brief #4, Geiger GibsonProgram/ RCHN Community Health Foundation Research Collaborative, August 13, 2008.(http://www.gwumc.edu/sphhs/departments/healthpolicy/chsrp/downloads/RCHN_brief4_8-13-2008.pdf)74 Source: Vital Signs: The Role of Community Health Centers in Washington State, Washington Association ofCommunity & Migrant Health Centers, Community Health Network of Washington, and Community Health Plan ofWashington, August 2008.75 National Association of Community Health Centers webpage.76 Waitzkin H. (2005) Commentary—The History and Contradictions of the Health Care Safety Net. Health ServicesResearch, 40(3): 941-952.77 CHCs “will assure that no patient will be denied health care services due to an individual's inability to pay.” 42USCS § 254b

Dobson | DaVanzo


such factors as absence of transportation to afacility and/or inability to pay for services. Formany patients, however, the lack of otherprofessional health services may also includemore complex factors such as language fluency,health literacy, and cultural competency.

Cultural competency generally refers toheightened awareness and knowledge of theneeds of the individual client. Often, culturalcompetency manifests itself in a provider’sability to accurately interpret and respond tonon-verbal or other cultural cues or in the wayin which health care organizations provideinformation to their clients.78

Language services for individuals with limitedEnglish proficiency or for whom English is notthe primary language is of growing importancein treatment decisions and ensuring effectiveand appropriate patient care.79 These languageservices include multi-lingual providers, theprovision and appropriate use of interpreters, and translated materials, both for educational andadministrative purposes.

The WA CHC System is committed to ensuring access and encouraging consistent care, throughattention to reducing barriers to access by:

One stop shopping - Washington CHCs often co-locate a range of services in onelocation in order to enable access and support the health care home for patients.

Open access appointments - Many Washington CHCs let patients determineappointment scheduling based upon their work demands and time off.

Culturally competent care - Over 50 languages are spoken by providers andsupport staff at CHCs throughout Washington State.

Transportation - Washington CHCs also assist patients in getting to and fromtheir appointments. This service is especially important in rural areas.

Case management - Washington CHCs comprehensively manage patient care byhelping their patients navigate through an otherwise complex medical care deliverysocial service system.

78 Measuring Cultural Competence in Health Care Delivery Settings: A Review of the Literature. Report submittedto Health Resources and Services Administration by The Lewin Group, July 2001.79 Dana RH (1998). Projective assessment of Latinos in the United States: current realities, problems, and

prospects. Cultural Diversity and Mental Health, 4(3), 165-184.

Healthy Asian Recipes

International Community HealthServices serves a diverse mix of patients.

To respond to patient needs, ICHSprovides outreach, services, and

publications in multiple languages suchas Vietnamese, Chinese, Samoan,

Tagalog, Mien, Korean, and English.

Noteworthy is ICHS’ Diabetes EducationProgram. In addition to educationalclasses and support groups, ICHS

produces cookbooks with “traditionalAsian recipes that have been modified to

reduce fat, sugar, and salt content.”These cookbooks are printed in Chinese,

Khmer, Korean, Tagalog andVietnamese, with English translations.

Dobson | DaVanzo


CHCs Deliver High Quality Care, Achieving Positive Outcomes

The literature consistently indicates that both nationally and in Washington State, CHCsdeliver high quality primary and preventive care well suited to the populations they serve.Primary and preventive care are especially important considerations considering themedical and social challenges incumbent in the care of vulnerable and at-risk groups.

The literature reviewed also strongly suggests that CHCs fulfill an important role withinMedicaid, serving as the largest single source of primary health care and a resource that“performs particularly well for Medicaid patients.” 80 We reviewed several studies thatdemonstrate this high quality using a variety of indicators, including reduced preventablehospitalizations and adherence to quality standards. Although few studies are actuallyable to quantify improved health care outcomes against specific cost estimates, there are aconsiderable number of studies that document savings to individual programs or payers.81

Fewer Preventable Hospitalizations

Reduction of preventable hospitalizations is generally regarded as an indicator of patient accessto primary care, preventive care, and outpatient care for chronic conditions. We found numerousstudies indicating that CHCs have been able to reduce preventable hospitalizations. For example,in a national study, Hadley and Cunningham reported that uninsured patients’ proximity to CHCswas associated with lower levels of unmet need.82 Recent evidence from Washington Stateshows that hospital admissions for managed care patients are 21% below the benchmark forPacific Region Medicaid providers.83

Epstein reported that patients in areas served by a CHC had 5.8 fewer preventablehospitalizations per 1000 individuals over a three-year period compared with similar patients inareas not served by a CHC.84 In an earlier study, Falik and colleagues also found that Medicaidpatients who received their care from CHCs were less likely to have avoidable admissions.85

80Dor A, Pylypchuck Y, Shin P, Rosenbaum S. (2008) Uninsured and Medicaid Patients’ Access to PreventiveCare: Comparison of Health Centers and Other Primary Care Providers. Research Brief #4, Geiger GibsonProgram/ RCHN Community Health Foundation Research Collaborative, August 13, 2008.(http://www.gwumc.edu/sphhs/departments/healthpolicy/chsrp/downloads/RCHN_brief4_8-13-2008.pdf)81 Frick K, Shi L, Gaskin D. (2007). Level of evidence of the value of care in Federally Qualified Health Centers forpolicy making. Progress in Community Health Partnerships: Research, Education, and Action. The Johns HopkinsUniversity Press.http://muse.jhu.edu/journals/progress_in_community_health_partnerships_research_education_and_action/v001/1.1frick.pdf)82 Hadley J, Cunningham P. (2004). Availability of safety net providers and access to care for uninsured persons.Health Services Research, 39(5): 1527-1546.)83 Internal Review Document from Community Health Plan.84 Epstein AJ. The role of public clinics in preventable hospitalizations. (2004) Health Services Research, 32(2):405-420.85 Falik M, Needleman J, Wells, BL, Korb J. (2001). Ambulatory care sensitive hospitalizations and emergencyvisits: experiences of Medicaid patients using Federally Qualified Health Centers. Medical Care, 39(6): 551-556.

Dobson | DaVanzo


Consistent with these findings, Falik later found that CHC Medicaid beneficiaries had one thirdfewer ambulatory care sensitive events compared to other providers (5.7 vs. 8.2 ambulatory caresensitive hospitalizations86 using 1992 Medicaid claims data for 48,738 Medicaid beneficiaries in24 service areas across five states. Medicaid patients receiving usual care at CHCs were 11% lesslikely to be hospitalized for an ambulatory care sensitive condition than Medicaid patientsreceiving usual care from outpatient and office-based physicians, even after controlling forpatient case mix and other factors.

Adherence to Quality Standards

Several studies that explore care quality provided by CHCs, indicate that the care in CHCs isequivalent to or, in some cases, better than care in hospital outpatient departments or other caresettings.87,88,89 When care for specific conditions is examined, most studies conclude that thequality of care provided in CHCs generally follows prevailing community quality standards. Forexample, Porterfield and Kinsinger abstracted medical records of diabetes patients in a sample ofeight physicians’ offices and three CHCs and found that diabetes patients at CHCs were morelikely to have appropriate values for four of six process measures of quality of care.90

Similarly, Ulmer found that CHCs met or exceeded prevailing practices across other health caresettings (though some variation existed among sites) in a series of medical records reviewsassessing the quality of care at CHCs for acute otitis media (common term for inner earinfections), diabetes, asthma, and hypertension. The study concluded that quality of care atCHCs was at least as high as care provided in other settings.91

Over time, care of chronic conditions in CHCs has become the subject of targeted federalinitiatives designed to improve outcomes, such as the Health Disparities Collaborative (whichevolved to become the Primary Health Care Collaborative). Chin and colleagues reviewed thecharts of a sample of diabetic adults and found that, despite considerable challenges, CHC ratesof adherence to process measures of quality (e.g., dilated eye examinations, diet consultation,and foot care) was high, as was patient glycemic control.92

86 Ambulatory Care Sensitive Conditions (ACSC’s) are medical problems that are potentially preventable. Forexample, hypertension (high blood pressure) is a condition that can be treated outside of a hospital. With propermedication and management of care, most people should not need to be hospitalized for hypertension. Ambulatorycare sensitive conditions are those "for which good outpatient care can potentially prevent the need forhospitalization, or for which early intervention can prevent complications or more severe disease" (AHRQ 2004).87

Shin P, Markus A, and Rosenbaum S. Measuring Health Centers against Standard Indicators of High QualityPerformance: Early Results from a Multi-Site Demonstration Project. Interim Report. Prepared for the UnitedHealth Foundation, August 2006.www.gwumc.edu/sphhs/healthpolicy/chsrp/downloads/United_Health_Foundation_report_082106.pdf88

Hicks LS, et al. (2006) The quality of chronic disease care in US Community Health Centers. Health Affairs25(6):1713-1723.89

Frick, KD, Regan J. (2001) Whether and where Community Health Centers users obtain screening services.”Journal of Healthcare for the Poor and Underserved 12(4): 429-45.90 Porterfield DS, Kinsinger L. (2002). Quality of care for uninsured patients with diabetes in a rural area. DiabetesCare, 25(2): 319-323.91 Ulmer C, Lewis-Idema D, Von Worley A, et al. (2000). Journal of Ambulatory Care Management, 23(1): 23-28.92

Chin, MH et al. (2004) Improving diabetes care in Midwest community health centers. Diabetes Care, 27(1):2-8.

Dobson | DaVanzo


CHCs are Cost Effective Providers

The literature supports the value proposition for continued public support of CHCs. There is anincreasing need in the policymaking arena for evidence of the cost effectiveness of health careinterventions, and evidence on the cost savings of CHCs is extensive.93 Few of these studies,however, systematically compare the costs of providing care in CHCs versus alternative settings,as they generally focus on the CHCs.94

Although CHC patients tend to be generally sicker and more complex than the generalpopulation, there are studies indicating CHCs have been able to achieve 30% Medicaidsavings by reducing avoidable hospitalizations and other relatively expensive care.95

Another examination of various costs between CHCs and other primary care providersfound that CHCs spent, on average, 41% or $1,810 less per patient.96 These savings,resulting from lower reliance on more costly care, such as avoidable inpatientadmissions, translated into an estimated totalsavings of $10 billion to $18 billion in 2004 forproviding care to 13 million low-incomepatients across the nation.

In another study, researchers analyzed 2003-2004 Medicaid fee-for-service claims data inorder to compare the total costs of servicesprovided to Michigan health center patients tothose of Medicaid patients who do not usehealth centers as their primary provider. Theyfound that CHC patients incurred lower totalper-member per-month Medicaid costs thannon-CHC users, even controlling for age anddisability status ($387.71 vs. $432.58).97

CHCs function as health care homes forpatients, improving the continuity of care. Theliterature contains considerable evidence thathaving a particular place as a medical home is

93 Proser M. (2005). Deserving the spotlight: Health centers provide high quality and cost effective care. Journal ofAmbulatory Care Management, 28(4):321-330.94 Proser M, Aaron KF, Meyers D, Cornell C. (2007) Building a Research Agenda for Community Health Centersand the Medically Underserved: Meeting Proceedings. Johns Hopkins University Press.(http://muse.jhu.edu/journals/progress_in_community_health_partnerships_research_education_and_action/v001/1.1proser.pdf)95

Cunningham P. (2006). What accounts for differences in the use of hospital emergency departments across U.S.communities? Health Affairs 25: W324-W336.96 National Association of Community Health Centers (NACHS), The Robert Graham Center and Capital Link,2007. Access Granted: The Primary Care Payoff. (http://www.nachc.com/client/documents/issues-advocacy/policy-library/research-data/research-reports/Access_Granted_FULL_REPORT.pdf )97

McRae T, Stampfly RD. (2006). An Evaluation of the Cost Effectiveness of Federally Qualified Health Centers(FQHCs) Operating in Michigan. Institute for Health Care Studies at Michigan State University. www.mpca.net

Valley View Health Center

Providence Hospital was a leading forcein the creation of Valley View HealthCenter in southwestern Washington.

Enormous demand for charity care ledProvidence and other community

members to identify a more effectiveway to provide care to vulnerable

populations. Since opening its firstfacility in 2004, Valley View HealthCenter has grown rapidly to serve its

communities. From one facility donatedby Providence, Valley View HealthCenter has grown to operate threeadditional sites and has additional

expansion efforts underway.

Dobson | DaVanzo


generally associated with better utilization and outcomes, earlier and more accurate diagnoses,reduced emergency room use, fewer hospitalizations, lower costs, better prevention, and fewerunmet needs.98

Continuity of care between care-giver and patient that is consistently accessible and well-informed has been correlated to lower total healthcare costs, even after controlling for healthstatus and demographic characteristics.99 For example, studies indicate that CHCs can effectivelyprevent the onset of complications through early screening, detection, and management of costlychronic conditions.100 Also, a recent study of a South Carolina CHC found that Medicaid costsfor CHC patients with diabetes were $438 less than costs associated with other primary caresettings ($1,340 in CHCs vs. $1,778 other ambulatory care practices).101

A very early and sentinel study comparing CHC and private sector Medicaid patients inWashington State found that care in CHCs was 58% less costly to Medicaid than for patientsseeing private physicians.102

Health information technology is a significant advance that reduces medical errors and healthcare costs. Washington State’s CHC system started adopting health information technologyahead of the curve, and about three-fourths of Washington’s CHCs are already utilizing orimplementing electronic health record systems.103

98 Starfield B, Shi L. (2004). The medical home, access to care, and insurance: A review of the evidence. Pediatrics,113(5): 1493-1498.99 De Maeseneer JM, Prins L, Gosset C, Heydrick J. (2003). Provider continuity on family medicine: Does it make adifference for total health care costs? Annals of Family Medicine, 1(3): 144-148.100 Chin MH. (2007). The cost effectiveness of improving diabetes care in U.S. Federally Qualified Health Centers.Health Services Research 47(6 Pt 1):2174-2193.101 Proser M, Aaron KF, Meyers D, Cornell C. (2007) Building a Research Agenda for Community Health Centersand the Medically Underserved: Meeting Proceedings. Johns Hopkins University Press.(http://muse.jhu.edu/journals/progress_in_community_health_partnerships_research_education_and_action/v001/1.1proser.pdf)102 Howarth A, et al. (1995). Using Medicaid fee-for-service data to develop community health center policy.Managed Care Quality, 3(3): 91-98.103 Source: Vital Signs: The Role of Community Health Centers in Washington State, Washington Association ofCommunity & Migrant Health Centers, Community Health Network of Washington, and Community Health Plan ofWashington, August 2008.

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IV.The Economic Impact of CHCs on Their Communities

This chapter provides our estimates of the total economic output, labor income, employment(jobs) and tax effects of Washington CHCs and CHP/CHNW expenditures on Washington Stateand Washington’s 33 counties.104 An important part of our economic analysis was to develop aflow of funds analysis that combines Washington CHC and CHP/CHNW expenditures into aconsistent analysis. As mentioned above, we call these combined expenditures “WashingtonCommunity Health Center System” expenditures, or WA CHC System. This acronym is usedbelow to designate the expenditures studied in this report. When referring to community healthcenters, we use the term CHC unless quoting federal statute.

We start with an overview of the relationship of CHC spending to overall community economicvitality. We note that the original concept of the CHC was to provide primary care to under- anduninsured populations, irrespective of ability to pay, while at the same time increasing theeconomic vitality of vulnerable, resource-poor communities by providing jobs and strengtheningeconomic infrastructure. Under the CHC financing structure, federal dollars flow directly tocommunities. As a result, economic development dollars provided to CHCs are not easilyreplaced if CHC funding is interrupted.

We next provide summary statistics on Washington State CHCs from the Uniform Data System(UDS) for 2006. This information affords us a sense of populations treated. Types of patientcoverage, third party insurance, and funding sources.105

Next, we provide our economic impact results for the WA CHC System. We conclude with adiscussion of the importance of the WA CHC System to Washington State economics.

Purpose and Overview: The Economic Context of CHCs

From experiments with community development in South Africa during the 1950s and U.S.Office of Economic Opportunity Programs of the 1960s, the contemporary CHC of 2008 hasevolved into a mainstream provider and an economic growth engine.106 The original andsustaining rationale for CHCs is that improving individuals’ health status improves the socialstructure and economic vitality of communities.107

The National Health Services Corps Program and the J-1 Visa waiver program for physiciansbring and attract talent and mentoring to communities that would otherwise be hard-pressed torecruit and retain clinical and other professionals. The fact that a majority of CHC board

104 For the purposes of this paper, “CHC” is used to describe a medical facility that meets the requirements of 330 ofthe Public Health Service Act (42 USCS § 254b). Facilities include recognized Federally Qualified Health Centers(“FWHCs”) and facilities that meet the requirements for FQHCs (“look alikes”).105 The UDS numbers do not match one for one in our survey results because they are related to CHCs, while oursurvey relates to the WACHC system. The UDS numbers are consistently reported, however, and provide abackdrop to our study.106 Hunt JW. (2005) Community Health Centers’ impact on the political and economic environment: TheMassachusetts Example. Journal of Ambulatory Care Management, 28(4): 340-347.107 Geyer HJ. AJPH, p. 1715

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members are health center patients directly links CHC grassroots activities back to thecommunities’ clinical, public health, and economic needs.

Over 40 years after the first CHCs were implemented, the core of these concepts persists. CHCsadd economic value to their communities as they provide valuable clinical and supportiveservices. This is especially true because CHCs are located in medically underservedcommunities with a high proportion of uninsured and underinsured individuals. Theseindividuals are typically low-income and socially and ethnically diverse. Without a viable healthsector, these communities would have diminished quality of life and economic growth potential.Rural areas, in particular, are vulnerable to the effects of poor health on their economic vitality.Rural targeting of CHCs is ensured because Section 330 requires that between 40 and 60 percentof CHC grants be awarded to self-declared rural areas.108

The ability to measure the economic impact of publically-supported initiatives has increaseddramatically over the past decade, as powerful software has been developed to quantify thecommon sense notion that health care and other economic activities generate personal incomeand employment. These, in turn, produce economic vitality for communities.

In the case of CHCs, this means that direct CHC funding in the local community createssuccessive rounds of spending by both other businesses and CHC employees. The “input-output” modeling employed in this paper captures these “ripple” (multiplier) effects.

CHCs are powerful economic engines in Washington State for at least siximportant reasons.

CHCs have been described as being “important economic engines in their communities.”109 First,and most obviously, they make sizable expenditures in their communities. CHC expendituresare all the more important because CHCs target low-income, medically underserved and otherrural areas that typically are economically underdeveloped.

108 NHPF p. 7109 Proser M. (2005). Deserving the spotlight: Health centers provide high quality and cost-effective care. Journal ofAmbulatory Care Management, 28(4): 321-330.

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Second, Washington State CHCs attract dollars into the community from outside sources. Grantdollars (about 20% of CHC revenues) 110 come directly from the federal and state government toWashington communities. In addition, public funds from Medicare (about 3.8% of revenues)and Medicaid (about 51% of revenues)111 for Washington CHCs originate from outside thecommunities CHCs serve. These public funds introduced into Washington State’s low-incomecommunities have a powerful economic impact.

Third, state Medicaid dollars draw a federal matchbased on each state’s assigned Federal MedicalAssistance Percentage (FMAP) for federallymatched Medicaid programs. Washington’sFMAP is approximately 50% of overall spending,which means that for every dollar spent onfederally matched Medicaid health care services byWashington, the federal government alsocontributes a dollar towards the Medicaid costs.This results in approximately half of the Medicaidcosts in the state paid for by state funds and halfpaid for by federal funds. This means that fromthe state’s perspective, Medicaid dollars have aspending multiplier associated with them evenbefore the IMPLAN (I/O) model’s economicmultipliers are calculated. This is important to theeconomic analysis as Medicaid represents abouthalf of CHC expenditures in Washington State.

Fourth, CHC expenditures provide neededemployment, strengthening the community’s socialsupport and educational systems.

Fifth, by serving as safety net providers providing care to Washington State’s uninsured andunderinsured, CHCs strengthen local community hospitals and primary care providers whowould otherwise find their financial surpluses eroded with increased bad debt and charity careloads. The safety net focus of CHCs on migrant, homeless, public housing and low-incomecommunity residents strengthens the overall health care delivery system of Washington CHCcommunities. In 2007, Washington CHCs provided health care services to one third of thestate’s uninsured patients. When these non-paying patients use community hospital care, it addsto the hospital’s charity care load, which is ultimately paid for by state government and theprivately insured.

This cross-subsidization also affects local employers whose premiums are somewhat lower thanthey otherwise might be because community hospitals can reduce their commercial charges as aresult of the charity care provided by CHCs. To this end, cutting CHC Medicaid budgets is

110 Washington Rollup Report, Calendar Year 2006 Data, Bureau of Primary Health Care Section 330 Grantees,Uniform Data System (UDS), Health Resources and Services Administration.111 The national average as of 2003 was about 36% (NHPF p. 13)

¡Familia y Salud!

Family Health Centers, servingNorthcentral Washington, launched

¡Familia y Salud! to increasemigrant/seasonal farm workers’ accessto comprehensive health services and

information. Particularly noteworthy isthe use of radio to inform target

populations of preventive activities,including “Heat Related Illnesses,” and

“Ladder Safety.”

In addition to the community healthbenefits, ¡Familia y Salud! brings

external funding into the communitythrough a multi-year federal grant.

Family Health Centers plans to sustainthe program through multiple fundingsources, including private foundations,

corporate giving and individualcontributions.

Dobson | DaVanzo


counter-productive in that it increases local employer, and perhaps, overall Washington StateMedicaid program health care expenditures.

Sixth, CHCs reduce overall system costs by reducing more expensive inpatient care through theprovision of less expensive ambulatory preventive care.

In summary, CHCs improve the entire community’s health care – those that receive their care atCHCs as well as private pay patients who receive their care from local physicians andcommunity hospitals. In addition, CHC jobs are valuable, and are not likely to be replaced ifWashington State CHCs are downsized or should cease to exist.112 The communities CHCsserve—medically underserved areas and medically underserved populations—are not productivein job development and CHC expenditures represent vital infusions of outside capital. Thus,without CHCs’ economic value added, many Washington State communities would besubstantially weaker, both financially and socially.

There are numerous arguments supporting the contention that CHCs provide positive economicimpacts to Washington State communities. Limiting CHC capacity would represent real anddemonstrable hardship to underinsured, low-income communities. Indeed, additional fundingcould be beneficial. Washington CHCs report difficulty finding specialty physicians for theirpatients to complement CHCs’ primary care services. These barriers to specialty care havesignificant consequences to community health status. Funding to support specialty care referralnetworks would further improve CHC economic benefit to their communities.

Summary Operating Statistics for Washington State CHCs

The Bureau of Primary Health Care Section 330 Grantees Uniform Data System (UDS) providesinformation on CHCs at the aggregate level. The Washington State “Rollup Report” for calendaryear 2006 provides data of interest to our analysis.113 A summary of these data is presentedbelow.

Washington State CHCs treated just fewer than 600,000 persons. The population treated ishighly diverse as to race and ethnicity, with about 30% requiring an interpreter. About 70% ofthe treated population has an income below 100% of the poverty level.

Accordingly to UDS data, Washington State CHCs employ approximately 5,000 FTEs,providing about 2.3 million encounters.114 These FTEs represent a wide range of provider andsupport staff specialties. Expenditures were $410.3 million with income of $423.1 million.Grants represented about 20% of revenues, with other revenues coming mostly from public thirdparty payers.

112 The index for medical under-service reflects economic vulnerability by including the percentage of thepopulation with income below the poverty level (NHPF, p.7)113 Bureau of Primary Health Section 330 Grantees Uniform Data System (UDS) calendar year 2006. WashingtonRollup Report prepared by John Snow, Inc. Washington Calendar Year 2006, Report Roll Up, Table 3B.114 We note that FTEs that we use in our model also include FTEs for CHP/CHNWA.

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Medicaid represented 51% of revenue received by grantees, Medicare about 4%, other publicabout 9%, self-pay at about 7%, and other payers at about 6%. Thus, public payment frompayers external to Washington State CHC communities represents the majority of CHCrevenues. Income from public managed care programs represented about 37% of overall CHCrevenues.

The population cared for in Washington State CHCs is highly diverse as can be seen in Table 2.

Table 2: CHC Treatment Population – Races, Ethnicity, LanguageRace/Ethnicity /Language Percent of Total

Total Asian/Hawaiian/Pacific Islands 6.6%

Black African American 6.4%

American Indian 2.0%

White (not Hispanic or Latino) 43.6%

Hispanic or Latino 37.2%

Unreported 4.2%

Total 100.0%

Patients best served in language other thanEnglish

29.9%

Source: Bureau of Primary Health Care Section 330 GranteesUniform Data System, 2006: Table 3B Patients byRace/Ethnicity/Language

Patient income levels are disproportionately reflective of poverty levels. This can be seen inTable 3.

Table 3: CHC Treatment Population Income as Percent ofFederal Poverty Level

Incomes Percent ofPoverty Level Percent of Known Percent of Total

100% and below 68.6% 57.8%

101% – 150% 18.1% 15.2%

151% - 200% 6.8% 5.7%

Over 200% 6.5% 5.4%

Unknown * 15.9%

Total 100.0% 100.0%

Source: Bureau of Primary Health Care Section 330 Grantees Uniform Data System,Washington Calendar Year 2006, Report Roll Up, Table 4: Patients bysocioeconomic characteristics

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CHCs employ a wide variety of staffing categories, as shown in Table 4.

Table 4: CHC Staffing CategoriesPersonnel by Major Service Category Percent of Total

Physicians/Medical Care Services 30.9%

Dentistry/Dental Services 10.9%

Mental Health/Substance Abuse/Other 3.2%

Pharmacy 3.6%

Enabling Services 12.1%

Administrative 19.9%

Patient Services Support Staff/Facility 18.8%

Total 100.0%

Source: Bureau of Primary Health Care Section 330 Grantees UniformData System, Washington Calendar Year 2006, Report Roll Up, Table5: Staffing and Utilization

Patient payment sources are heavily weighted towards none/uninsured (32.8%) andMedicaid/SCHIP as shown in Table 5.

Table 5: Patients by Source of Insurance

Source of Insurance Percent of Patients

Medicaid/SCHIP 41.6%

Other Public Insurance e.g. BasicHealth

7.0%

Medicare 5.7%

Private Insurance 12.8%

None/Uninsured 32.8%

Total 100%

Source: Bureau of Primary Health Care Section 330 GranteesUniform Data System, Washington Calendar Year 2006, ReportRoll Up, Source: Table 4: Patients by socio economiccharacteristics

Employment is represented by 4,892 FTEs, which represents 1.4% of Education and HealthServices in the State of Washington.115 These employees collectively provided 2,339,051encounters in 2006. Physicians reflected 3,347 encounters per FTE and dental service providersrepresent 2,557 encounters per FTE.

Expenditures for the 23 reporting CHCs were $410,311,608 in 2006. Medical care represented56.6%, other clinical services 32.2% and enabling services 11.2% of these expenses. Totalincome from all sources was $432,138,370. This revenue comes from a variety of sources. SeeTable 6.

115 Bureau of Labor Statistics, Table 5 Employees on nonfarm payrolls by state and selected industry sector,seasonally adjusted, http://www.bls.gov/news.release/laus.t05.htm.

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Table 6: CHC Funding Sources – Grants and Patient Insurance CoverageCategories

Source Percent of Total

Grants 20.2%

Federal 12.0%

Nonfederal 8.2%

Revenue from Service to Patient 76.4%

Self pay 7.0%

Medicaid 51.1%

Medicare 3.8%

Other public 8.5%

Other private 6.0%

Revenue from Indigent CarePrograms

0.7% 0.7%

Other 2.7% 2.7%

Total 100.0% 100.0%

Source: Bureau of Primary Health Care Section 330 GranteesUniform Data System, Washington Calendar Year 2006, Report RollUp, Exhibit A. Total revenue received by BPHC Grantees

The Impact of the Washington CHC System on State and CountyEconomies

This section of the report presents the results of our analyses showing the economic impact of theWA CHC System expenditures on the State of Washington, and county economies where WACHC System expenditures are present. The WA CHC System was defined above to reflect CHCpatient expenditures and CHP/CHNW administrative and other provider expenditures as of 2006.Statewide results are presented first, followed by detailed county level analysis.

A. State-Level WA CHC System Economic Impacts

Table 7 shows the breakdown of the WA CHC System economic impact, labor income, andemployment (jobs). For every $1 of WA CHC System expenditures, the state realizes $1.77 intotal economic output.

Economic Output: In 2006 WA CHC System direct expenditures were 682.8 million or about0.23% of state GDP of $292.2 billion and 2.04% of state healthcare expenditures. The total WACHC System economic output of $1,206.6 million represents 0.41% of state GDP and 3.60% ofstate healthcare expenditures.

Labor Income: In 2006, WA CHC System direct labor income was $392.7 million, or about0.23% of state labor income of $167.9 billion. The WACHC System labor expenditure was$564.1 million or about 0.34% of the state total.

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Employment (Jobs): In 2006, WA CHC System direct employment was 5,192 jobs or about0.14% of the state total of 3.78 million jobs. The WA CHC system total jobs were 8,427 or about0.22% of the state total.

Table 7 – Summary of State–Level WA CHC System Economic Impacts

Impact

State GDP(Billions ofDollars andMillions of

Jobs)

State HeathExpenditures

(Billions)

DirectExpenditures

(millions), LaborIncome (millions)

Employment(Jobs)

Direct WA CHCSystem


State Totals

Direct WA CHCSystem


State HealthExpenditures

TotalExpenditures

(millions),Labor Income

(millions)Employment

(Jobs)

Total Outputas a Percent

of StateTotals

Total WA CHCSystem Outputas a Percent of

State HealthCare

Expenditures

TotalEconomicMultiplier

(1) (2) (3) (4) (5) (6) (7) (8) (9)

EconomicOutput $292 $34 $683 0.23% 2.04% $1,207 0.41% 3.6% 1.77

LaborIncome $168 n/a $393 0.23% n/a $564 0.34% n/a 1.44

Employment(Jobs) 3.78 n/a 5,192 0.14% n/a 8,427 0.22% n/a 1.62

Source: Dobson | DaVanzo survey of Washington State Community Health Centers: Financial and Employment Impact calculatedusing IMPLAN Software.

Table 7 by columns shows (1) the state GDP labor income and employment (jobs), (2) statehealth care expenditures, (3) direct WA CHC system expenditures, labor income andemployment, (4) direct WA CHC system expenditures, labor income and employment as percentof corresponding state totals, (5) direct WA CHC system expenditures as a percent of state healthcare expenditures, (6) total WA CHC System economic output (direct WA CHC System valuemultiplied by the corresponding multiplier (e.g. $682.8 x 1.77 ≈ $1206.6),116 (7) total WA CHCSystem economic values as a percent of corresponding state total values, (8) total WA CHCSystem economic output as a percent of state health care spending, and finally, (9) the economicmultipliers used to produce total WA CHC System total economic output values.

B. Total State Level WA CHC System Tax Impacts

Table 8 shows the impact of the total economic output of the WA CHC System on federal andstate/local taxes and the total. The federal tax impact is $134.6 million, while the state/local taximpact is $41.0 million for a total of $176.1 million.

Table 8 – Summary of CHC Tax Impacts

Federal State/Local Total*Taxgenerated byCHCs

$134,594,182 $40,993,175 $176,076,383

Source: Dobson | DaVanzo survey of Washington State Community Health Centers: Financialand Employment Impact calculated using IMPLAN Software.

*The slight difference between the sum of State/Local and Federal is due toCorporate Enterprise Taxes.

116 The difference between $1,208.55 and $1,206.6 is due to rounding error.

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C. WA CHC System Impact on Other Industries

Table 9 below shows how WA CHC System expenditures affect other industries. WA CHCSystem expenditures primarily affect the Health Care and Social Assistance, Retail Trade andFinance and Insurance industries/sectors. This means that WA CHC System expenditures have abroader effect upon the community than the direct effect would suggest. This comes from the“ripple” multiplier effects of WA CHC System expenditures on other industries.

Table 9: Employment (Jobs) and Economic Activity by Industry/Sector*

IMPLAN Group

EconomicImpact

(In Millions)Employees

(Jobs)

Health Care and Social Assistance $659.0 5,263

Retail Trade $71.7 577

Finance and Insurance $61.3 397

Real Estate and Rental and Leasing $40.8 181

Owner-occupied dwellings $39.4 0

Manufacturing $36.3 91

Public Administration $30.2 146

Professional, Scientific, and Technical Services $27.8 195

Accommodation and Food Services $23.8 323

Wholesale Trade $23.7 110

Other $107.6 877

Total $1,206.6 8,427

Source: Dobson | DaVanzo survey of Washington State Community Health Centers: Financialand Employment Impact calculated using IMPLAN Software.*Washington State total does not equal the sum of the counties due to the fact that themultiplier effect is greater the larger the geographic and demographic entity beingconsidered.

WA CHC System spending has an important impact on the Washington State economy,especially the health care sector. This effect is magnified during economic downturns as WACHC System expenditures act as a stabilizing force on state and county economics.

This stabilizing, counter-cyclical, effect is bolstered by the fact that CHCs are funded in largepart by Medicaid dollars which received approximately 50% federal match in the State ofWashington. From an economic perspective, a decrease in Washington State’s Medicaid supportof CHCs could result in reductions in the amount of federal matching funds received byWashington and the resulting multiplier effects. As noted above, the clinical effects of less CHCcare would also be harmful to communities in terms of population health and workforce vitality.

The implications of Medicaid spending on the WA CHC System economic impact are importantto understand. The power of Medicaid WA CHC System spending is detailed below.

Dobson | DaVanzo


State Medicaid spending draws a federal match based on each state’s assigned Federal MedicalAssistance Percentage (FMAP) for federally matched Medicaid programs. Washington’s FMAPis approximately 50% which means that for every dollar spent on Medicaid health care servicesby Washington State, the federal government also contributes a dollar towards the Medicaidcosts. This results in approximately half of the federally matched Medicaid costs in the state paidfor by state funds and half paid for by federal funds.

When this match is added to the multiplier effect for the WA CHC System it magnifies theimpact of every state Medicaid dollar. As a result, for every $1 expenditure of state supported,federally matched Medicaid by the WA CHC System, the state realizes $3.54 in total economicoutput. The implicit multiplier of 3.54 is an extremely powerful economic inducement for thestate to maintain, and, where possible, improve, CHC Medicaid reimbursement.

These analyses strongly suggest that WA CHC System expenditures are far more important tothe local economy than economic growth that is entirely locally generated. To a certain extent,WA CHC System expenditures are economic multipliers on “steroids.”

D. County Level WA CHC System Economic Impacts

The state level impact analyses are useful and demonstrate the economic power of WA CHCSystem expenditures. However, given the CHC mission to strengthen medically underservedareas, it is important to focus on local economic impacts. Medically underserved areas areeconomically deprived communities that are highly responsive to CHC expenditure impacts thatotherwise might not exist. That is, decreases in WA CHC System expenditures in medicallyunderserved communities could lead to reductions in economic activity and job creation that arenot easily replaced.

The economic profiles of Washington State and counties are shown in Table 10. Thisinformation shows a wide range across counties in population density, unemployment levels, andpercent unemployment. The higher the degree of economic impoverishment, the more importantoutside sources of economic stimulus are to the community. As noted above, a large share ofWA CHC System expenditures are funded externally to the community.

Dobson | DaVanzo


Table 10: Selected Economic Profile of Washington Counties

County Population Area

PopulationDensity

(PerSquareMile)

Number ofIndustries

Number ofHouseholds

Total PersonalIncome

PersonalIncome

PerHousehold Employment

PercentUnemployed*

PercentPoverty**

Value Added(Domestic Product)

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)

Adams 16,887 1,925 8.8 105 5,380 $407,562,500 $75,755 8,874 6.3% 18.3% $496,159,000

Asotin 21,247 636 33.4 131 8,661 $620,992,300 $71,700 8,835 4.2% 17.6% $426,922,000

Benton 149,463 1,703 87.8 189 59,178 $4,796,389,000 $81,050 83,483 5.7% 11.1% $6,179,587,000

Chelan 71,034 2,922 24.3 179 26,821 $2,220,221,000 $82,779 55,798 5.1% 13.9% $2,656,830,000

Clallam 70,400 1,745 40.3 168 29,932 $2,127,951,000 $71,093 31,424 5.8% 12.8% $1,841,533,000

Clark 412,938 628 657.5 279 148,436 $13,306,470,000 $89,644 173,648 5.8% 11.5% $12,671,984,000

Columbia 4,087 869 4.7 87 1,731 $88,217,610 $50,963 1,826 8.6% 13.6% $90,590,000

Cowlitz 99,905 1,139 87.7 198 38,141 $2,647,362,000 $69,410 45,401 6.5% 15.0% $3,100,160,000

Douglas 35,772 1,821 19.6 125 13,017 $832,649,000 $63,966 13,233 5.0% 15.1% $676,710,000

Ferry 7,560 2,204 3.4 82 2,958 $138,818,900 $46,930 1,949 9.2% 20.0% $130,772,000

Franklin 66,570 1,242 53.6 155 20,314 $1,413,748,000 $69,595 35,916 7.0% 17.8% $1,831,745,000

Garfield 2,223 710 3.1 56 990 $40,797,040 $41,209 1,116 5.3% 14.3% $55,868,000

Grant 82,612 2,676 30.9 164 27,201 $2,019,237,000 $74,234 41,699 6.5% 17.3% $2,298,960,000

GraysHarbor

71,587 1,917 37.3 165 28,155 $1,785,339,000 $63,411 29,918 7.0% 17.2% $1,851,847,000

Island 81,489 209 389.9 158 31,459 $2,641,990,000 $83,982 33,850 5.1% 8.0% $2,152,756,000

Jefferson 29,279 1,809 16.2 157 13,259 $1,028,696,000 $77,585 12,521 5.0% 11.5% $713,813,000

King 1,826,732 2,126 859.2 398 770,099 $94,276,170,000 $122,421 1,541,329 4.1% 9.6% $148,080,870,000

Kitsap 240,604 396 607.6 206 93,352 $9,014,962,000 $96,570 118,949 4.7% 9.0% $6,947,985,000

Kittitas 37,189 2,297 16.2 146 15,672 $1,028,700,000 $65,639 18,510 5.2% 21.7% $963,390,000

Klickitat 20,335 1,872 10.9 133 8,009 $567,436,300 $70,850 9,408 7.1% 17.4% $557,001,000

Lewis 73,585 2,408 30.6 200 27,874 $1,985,808,000 $71,242 32,330 6.9% 16.3% $2,122,479,000

Lincoln 10,376 2,311 4.5 97 4,332 $275,170,600 $63,520 4,054 5.6% 12.6% $238,838,000

Mason 55,951 961 58.2 160 21,482 $1,496,193,000 $69,649 18,828 5.8% 14.5% $1,035,808,000

Okanogan 40,040 5,268 7.6 147 15,946 $1,079,847,000 $67,719 22,470 6.6% 21.8% $1,030,131,000

Dobson | DaVanzo


County Population Area

PopulationDensity

(PerSquareMile)

Number ofIndustries

Number ofHouseholds

Total PersonalIncome

PersonalIncome

PerHousehold Employment

PercentUnemployed*

PercentPoverty**

Value Added(Domestic Product)

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)

Pacific 21,735 975 22.3 116 9,557 $550,237,700 $57,574 9,043 6.5% 15.8% $412,555,000

Pend Oreille 12,951 1,400 9.3 101 4,978 $312,102,000 $62,696 3,884 7.4% 18.7% $265,546,000

Pierce 766,878 1,676 457.6 312 292,000 $25,927,230,000 $88,792 371,995 5.1% 11.3% $25,925,493,000

San Juan 15,298 175 87.4 143 7,683 $700,151,300 $91,130 8,388 3.8% 9.2% $448,237,000

Skagit 115,700 1,735 66.7 212 43,366 $3,794,566,000 $87,501 63,863 5.2% 13.3% $4,116,950,000

Skamania 10,833 1,656 6.5 98 4,131 $274,106,800 $66,354 2,719 7.0% 11.1% $150,960,000

Snohomish 669,887 2,090 320.5 301 257,807 $24,394,280,000 $94,622 291,710 4.5% 8.8% $21,636,081,000

Spokane 446,706 1,764 253.2 306 180,075 $13,760,180,000 $76,414 261,043 5.0% 14.6% $16,241,009,000

Stevens 42,632 2,478 17.2 148 15,865 $966,089,300 $60,894 13,730 7.0% 17.5% $764,504,000

Thurston 234,760 727 322.9 219 92,169 $8,392,502,000 $91,056 118,778 4.6% 10.6% $7,849,185,000

Wahkiakum 4,026 264 15.3 75 1,653 $99,745,030 $60,342 1,172 6.6% 10.2% $60,115,000

Walla Walla 57,721 1,270 45.4 177 20,782 $1,512,787,000 $72,793 31,568 5.4% 18.6% $1,781,936,000

Whatcom 185,953 2,120 87.7 260 75,470 $5,726,329,000 $75,876 105,951 4.5% 13.9% $6,648,284,000

Whitman 39,838 2,159 18.5 143 16,639 $894,449,800 $53,756 21,207 4.0% 26.6% $1,152,366,000

Yakima 233,105 4,296 54.3 227 76,986 $6,202,415,000 $80,565 127,444 6.8% 21.5% $6,629,407,000

Washington 6,385,888 66,579 95.9 2,511,560 $239,347,898,180 $95,298 3,777,864 4.9% 12.0% $292,235,369,000

Source: Dobson | DaVanzo survey of Washington State Community Health Centers: Financial and Employment Impact calculated using IMPLAN Software.

* Source: Washington State Employment Security Department (2007)

** Source: Department of Agriculture, Economic Research Service (2005)

Dobson | DaVanzo


Total economic impact at the county level. Table 11 below shows the economic impact ofWA CHC System spending on a county-by-county level, as well as for the state. The economicimpact of WA CHC System expenditures ranges around the state average of 0.4% with manycounties owing over one percent of their total economic activity to WA CHC Systemexpenditures (see Column 7). In these communities, the loss of the CHC would have a dramaticeffect, because jobs lost might not be replaced and the lack of clinical care could lead topopulation exodus from these communities.

Perhaps more telling is the degree to which health care expenditures are influenced by WA CHCSystem expenditures. In many communities, between three and ten percentage points or more ofhealth care expenditures are represented by WA CHC System expenditures. This suggests thatthe targeting of CHC care is highly effective and is one of the reasons CHCs have been viewedas highly successful programs by numerous evaluators and various political administrations.

Dobson | DaVanzo


Table 11: State/County Level WA CHC System Economic Impacts117

State /County

State/County

GDP(millions)

State / CountyHeath

Expenditures(millions)*

Health CareExpenditures

as a Percent ofState/County

GDP


(millions)



GDP

Direct WA CHCSystem

Expenditures asa Percent ofState/County

HealthExpenditures

Total WACHC System

Output(millions)**

Total WA CHCSystem Outputas a Percent ofState/County

GDP**

Total WA CHCSystem Outputas a Percent ofState/CountyHealth Care

Expenditures** Multiplier

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)

Adams $496 $57 11.5% $25 5.0% 43.3% $32 6.5% 56.7% 1.31

Asotin $427 $87 20.4% $0 0.0% 0.0% $0 0.0% 0.0% 1.41

Benton $6,180 $671 10.9% $15 0.2% 2.3% $22 0.4% 3.3% 1.46

Chelan $2,657 $311 11.7% $26 1.0% 8.2% $39 1.5% 12.5% 1.52

Clallam $1,842 $298 16.2% $0 0.0% 0.0% $0 0.0% 0.1% 1.41

Clark $12,672 $1,862 14.7% $5 0.0% 0.3% $8 0.1% 0.4% 1.60

Columbia $91 $12 13.6% $0 0.0% 0.0% $0 0.0% 0.0% 1.22

Cowlitz $3,100 $370 12.0% $15 0.5% 4.0% $22 0.7% 5.8% 1.47

Douglas $677 $117 17.2% $0 0.0% 0.2% $0 0.0% 0.2% 1.28

Ferry $131 $19 14.9% $0 0.4% 2.5% $1 0.4% 3.0% 1.21

Franklin $1,832 $198 10.8% $16 0.9% 8.3% $23 1.3% 11.8% 1.42

Garfield $56 $6 10.2% $0 0.0% 0.0% $0 0.0% 0.0% 1.08

Grant $2,299 $283 12.3% $23 1.0% 8.3% $31 1.3% 10.9% 1.31

GraysHarbor

$1,852 $250 13.5% $2 0.1% 1.0% $4 0.2% 1.4% 1.45

Island $2,153 $370 17.2% $2 0.1% 0.5% $3 0.1% 0.7% 1.40

Jefferson $714 $144 20.2% $1 0.1% 0.5% $1 0.1% 0.7% 1.35

King $148,081 $13,193 8.9% $195 0.1% 1.5% $374 0.3% 2.8% 1.92

Kitsap $6,948 $1,262 18.2% $18 0.3% 1.4% $27 0.4% 2.1% 1.53

Kittitas $963 $144 14.9% $1 0.1% 0.5% $1 0.1% 0.7% 1.43

Klickitat $557 $79 14.3% $1 0.2% 1.7% $2 0.3% 2.1% 1.24

117 The county level data do not sum to the State level totals. This is due to larger multipliers for larger, more diverse geographic areas.

Dobson | DaVanzo


State /County

State/County

GDP(millions)

State / CountyHeath

Expenditures(millions)*

Health CareExpenditures


GDP


(millions)



GDP

Direct WA CHCSystem

Expenditures asa Percent ofState/County

HealthExpenditures

Total WACHC System

Output(millions)**

Total WA CHCSystem Outputas a Percent ofState/County

GDP**

Total WA CHCSystem Outputas a Percent ofState/CountyHealth Care

Expenditures** Multiplier

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)

Lewis $2,122 $278 13.1% $6 0.3% 2.3% $9 0.4% 3.4% 1.48

Lincoln $239 $39 16.1% $0 0.2% 1.2% $1 0.2% 1.5% 1.22

Mason $1,036 $209 20.2% $5 0.5% 2.3% $6 0.6% 3.0% 1.30

Okanogan $1,030 $151 14.7% $10 1.0% 6.7% $14 1.4% 9.5% 1.42

Pacific $413 $77 18.7% $1 0.2% 1.2% $1 0.3% 1.5% 1.30

Pend Oreille $266 $44 16.4% $2 0.6% 3.6% $2 0.7% 4.4% 1.20

Pierce $25,925 $3,628 14.0% $50 0.2% 1.4% $83 0.3% 2.3% 1.67

San Juan $448 $98 21.9% $0 0.0% 0.1% $0 0.0% 0.1% 1.39

Skagit $4,117 $531 12.9% $10 0.2% 1.9% $15 0.4% 2.9% 1.50

Skamania $151 $38 25.4% $0 0.1% 0.3% $0 0.1% 0.3% 1.21

Snohomish $21,636 $3,414 15.8% $37 0.2% 1.1% $56 0.3% 1.6% 1.52

Spokane $16,241 $1,926 11.9% $51 0.3% 2.7% $89 0.5% 4.6% 1.74

Stevens $765 $135 17.7% $10 1.2% 7.0% $13 1.7% 9.8% 1.39

Thurston $7,849 $1,174 15.0% $23 0.3% 2.0% $36 0.5% 3.1% 1.59

Wahkiakum $60 $14 23.2% $0 0.0% 0.2% $0 0.1% 0.2% 1.22

Walla Walla $1,782 $212 11.9% $6 0.4% 3.0% $9 0.5% 4.4% 1.47

Whatcom $6,648 $801 12.1% $16 0.2% 2.0% $26 0.4% 3.3% 1.63

Whitman $1,152 $125 10.9% $0 0.0% 0.0% $0 0.0% 0.1% 1.39

Yakima $6,629 $868 13.1% $110 1.7% 12.7% $171 2.6% 19.7% 1.56

Washington $292,235 $33,495 11.5% $683 0.2% 2.0% $1,207 0.4% 3.6% 1.77

Source: Dobson | DaVanzo survey of Washington State Community Health Centers: Financial and Employment Impact calculated using IMPLAN Software.* Kaiser Proportioned by IMPLAN Personal Income. In low-income counties, this may have the effect of underestimating health care expenditures as this methodology does not capture Medicaidexpenditures.

** Total includes all direct, indirect and induced effect.

# Washington State total does not equal the sum of the counties due to the fact that the multiplier effect is greater the larger the geographic and demographic entity being considered.

Dobson | DaVanzo


A detailed examination of Table 11 follows:

Column (1) indicates which counties received WA CHC System expenditures, according to oursurvey results. Column (2) shows the county GDP (value-added in IMPLAN terms). KingCounty ($148 billion) represents about half of the state’s GDP of $292 billion. Remainingcounties reflect wide divergence in economic activity with Garfield ($56 million) andWahkiakum ($60 million) reflecting the low end of the spectrum.

Column (3) presents our estimates of county health expenditures. These estimates areapproximations calculated as follows: First, we used the Kaiser118 estimate for WashingtonState-level health care expenditures in 2004; this was inflated to 2006 using IMPLAN inflators.We used the Kaiser estimate instead of the IMPLAN Health and Social Services Accountbecause the Kaiser estimates are more closely matched with the Centers for Medicare andMedicaid Services (CMS) Office of the Actuary (OACT) National Health Expenditures (NHE)accounting framework which was developed over the last 30 years.

Second, because Kaiser does not provide county level health care expenditure information, weneeded a way to allocate the Kaiser aggregate Washington State health care spending amounts toindividual counties. We tried numerous allocation techniques and in the end allocatedWashington health care expenditures to each county based on the county’s share of the state’spersonal income. We judged this to be the most accurate of the approaches we reviewed becausehealth care spending is highly income elastic. That is, health care spending levels are highlysensitive to personal income119 at the local, state, and international levels.

Column (4) shows the ratio of health care spending to state/county GDP. The overall state ratioof 11.5 percent is low relative to the national average which is 16.0 percent for 2006.120 Thisdiscrepancy is likely due to the fact that Washington State is a low user of hospital services andthe Kaiser system of health accounts may not exactly track the CMS NHE health care accounts.Given these caveats, the ratio of health spending to county GDP shows considerable variancearound the state average of 11.5%.

Column (5) shows our estimate of WA CHC System direct expenditures by state/county, astaken from our survey. These estimates range from King County ($195 million), Spokane ($51million), and Pierce ($50 million) to Grant ($23 million), Asotin ($1,663), Columbia ($2,896),and Wahkiakum ($27,062).

Column (6) shows WA CHC System direct expenditures as a percent of the county GDP andcolumn (7) shows WA CHC System expenditures as a percent of our State/county-level healthcare spending estimates. These two sets of figures indicate that WA CHC System expendituresrepresent a visible portion of local community expenditures. Column (7) results, discussedabove, indicates that the economic impact of WA CHC System expenditures varies around the

118 See Kaiser web site for details, http://www.statehealthfacts.org/comparemaptable.jsp?ind=592&cat=5.119 This estimate may underestimate health spending in poor counties due to public programs that tend to level outhealth care spending between rich and poor counties.120 Health Affairs 27, no.2 (2008): w145-w155 (published online 26 February 2008; 10.1377/hlthaff.27.2.w145.

Dobson | DaVanzo


state average of 0.4% with many counties owing over one percent of their total economic activityto WA CHC System expenditures.

Column (8) shows total WA CHC System output. Column (9) shows total WA CHC Systemoutput as a percent of state/county DGP. Column (10) shows total WA CHC System output as apercent of state/county Health Care Expenditures. Column (11) shows the multiplier for eachstate/county.

Labor impact at a county level. Table 12 details the labor income of WA CHC Systems onWashington State and counties. The labor income represents employee compensation andproprietor income, and has a smaller multiplier than the economic output multiplier (1.44 vs.1.77). This means that for every $1 of WA CHC System spending on labor, the state realizes$1.44 in labor income. The total labor income effect on the state is $564.1 million. WA CHCSystem direct and total labor income varies widely across the counties.

Table 12: Labor Income Impacts of WA CHC System Economic Activity in WashingtonCounties

County Direct Labor Impact Total Labor Impact Multiplier

Adams $14,220,387 $16,662,110 1.172

Asotin $805 $1,008 1.252

Benton $8,435,872 $10,686,807 1.267

Chelan $14,360,033 $18,684,624 1.301

Clallam $93,399 $112,047 1.200

Clark $2,741,221 $3,657,696 1.334

Columbia $1,677 $1,858 1.108

Cowlitz $8,185,907 $10,393,621 1.270

Douglas $115,362 $132,975 1.153

Ferry $266,404 $289,525 1.087

Franklin $9,345,941 $11,556,873 1.237

Garfield $114 $119 1.044

Grant $11,176,424 $13,525,003 1.210

Grays Harbor $1,261,279 $1,614,283 1.280

Island $1,100,660 $1,317,048 1.197

Jefferson $441,372 $507,862 1.151

King $111,256,256 $176,642,960 1.588

Kitsap $9,952,271 $13,181,547 1.324

Kittitas $408,979 $497,088 1.215

Klickitat $834,803 $918,567 1.100

Lewis $3,428,526 $4,434,827 1.294

Lincoln $272,587 $301,645 1.107

Mason $3,040,493 $3,436,841 1.130

Okanogan $5,822,797 $7,076,078 1.215

Pacific $531,188 $607,979 1.145

Pend Oreille $931,945 $1,008,967 1.083

Pierce $27,230,043 $38,344,360 1.408

San Juan $58,542 $69,718 1.191

Skagit $3,143,985 $3,810,863 1.212

Dobson | DaVanzo


County Direct Labor Impact Total Labor Impact Multiplier

Skamania $51,579 $57,342 1.112

Snohomish $20,833,276 $27,096,357 1.301

Spokane $28,249,804 $40,781,959 1.444

Stevens $5,073,233 $6,227,437 1.228

Thurston $10,720,799 $15,458,991 1.442

Wahkiakum $15,408 $16,867 1.095

Walla Walla $3,632,780 $4,624,978 1.273

Whatcom $9,320,054 $12,479,468 1.339

Whitman $27,660 $34,213 1.237

Yakima $62,899,660 $83,248,800 1.324

Total $392,742,178 $564,087,070 1.436

Source: Dobson | DaVanzo survey of Washington State Community Health Centers: Financialand Employment Impact calculated using IMPLAN Software.

Dobson | DaVanzo


E. State/County WA CHC System Impact on Employment (Jobs)

Table 13 shows the impact of WA CHC System expenditures on employment (jobs). Wecalculate that the WA CHC System is responsible for approximately 5,192 jobs, or about0.14 percent of the Washington State total of about 3.8 million jobs. For every one jobcreated by the WA CHC System, 1.62 jobs are created in the state. This employmentmultiplier of 1.62 produces a total WA CHC System employment (jobs) impact of 8,427 orabout 0.22 percent of the state total.

Dobson | DaVanzo


Table 13: Employment (Jobs) Impact of WA CHC System in Washington State, by County

County PopulationEmployment

(Jobs)Percent

Unemployed*Percent

Poverty**

Direct WACHC

SystemEmployees

Direct WACHC SystemEmploymentas a Percent

of County

Total WACHC System

Employee(Jobs)

Impact #

Total WACHC SystemEmploymentas a Percent

of County Multiplier

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)

Adams 16,887 8,874 6.3% 18.3% 179 2.0% 242 2.7% 1.35

Asotin 21,247 8,835 4.2% 17.6% 0 0.0% 0 0.0% n/a

Benton 149,463 83,483 5.7% 11.1% 80 0.1% 111 0.1% 1.38

Chelan 71,034 55,798 5.1% 13.9% 163 0.3% 267 0.5% 1.64

Clallam 70,400 31,424 5.8% 12.8% 1 0.0% 1 0.0% 1.40

Clark 412,938 173,648 5.8% 11.5% 62 0.0% 97 0.1% 1.56

Columbia 4,087 1,826 8.6% 13.6% 0 0.0% 0 0.0% n/a

Cowlitz 99,905 45,401 6.5% 15.0% 55 0.1% 75 0.2% 1.37

Douglas 35,772 13,233 5.0% 15.1% 56 0.4% 69 0.5% 1.25

Ferry 7,560 1,949 9.2% 20.0% 2 0.1% 2 0.1% 1.11

Franklin 66,570 35,916 7.0% 17.8% 128 0.4% 166 0.5% 1.30

Garfield 2,223 1,116 5.3% 14.3% 0 0.0% 0 0.0% n/a

Grant 82,612 41,699 6.5% 17.3% 220 0.5% 303 0.7% 1.38

Grays Harbor 71,587 29,918 7.0% 17.2% 24 0.1% 34 0.1% 1.40

Island 81,489 33,850 5.1% 8.0% 5 0.0% 6 0.0% 1.36

Jefferson 29,279 12,521 5.0% 11.5% 1 0.0% 1 0.0% 1.29

King 1,826,732 1,541,329 4.1% 9.6% 1,267 0.1% 2,303 0.1% 1.82

Kitsap 240,604 118,949 4.7% 9.0% 124 0.1% 187 0.2% 1.50

Kittitas 37,189 18,510 5.2% 21.7% 11 0.1% 15 0.1% 1.37

Klickitat 20,335 9,408 7.1% 17.4% 0 0.0% 21 0.2% n/a

Lewis 73,585 32,330 6.9% 16.3% 26 0.1% 39 0.1% 1.50

Lincoln 10,376 4,054 5.6% 12.6% 0 0.0% 1 0.0% 1.67

Mason 55,951 18,828 5.8% 14.5% 4 0.0% 5 0.0% 1.27

Dobson | DaVanzo


County PopulationEmployment

(Jobs)Percent

Unemployed*Percent

Poverty**

Direct WACHC

SystemEmployees

Direct WACHC SystemEmploymentas a Percent

of County

Total WACHC System

Employee(Jobs)

Impact #

Total WACHC SystemEmploymentas a Percent

of County Multiplier

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)

Okanogan 40,040 22,470 6.6% 21.8% 106 0.5% 148 0.7% 1.39

Pacific 21,735 9,043 6.5% 15.8% 7 0.1% 9 0.1% 1.26

Pend Oreille 12,951 3,884 7.4% 18.7% 9 0.2% 10 0.3% 1.15

Pierce 766,878 371,995 5.1% 11.3% 463 0.1% 764 0.2% 1.65

San Juan 15,298 8,388 3.8% 9.2% 0 0.0% 2 0.0% n/a

Skagit 115,700 63,863 5.2% 13.3% 93 0.1% 140 0.2% 1.51

Skamania 10,833 2,719 7.0% 11.1% 0 0.0% 2 0.1% n/a

Snohomish 669,887 291,710 4.5% 8.8% 329 0.1% 516 0.2% 1.57

Spokane 446,706 261,043 5.0% 14.6% 293 0.1% 474 0.2% 1.62

Stevens 42,632 13,730 7.0% 17.5% 56 0.4% 75 0.5% 1.35

Thurston 234,760 118,778 4.6% 10.6% 79 0.1% 119 0.1% 1.51

Wahkiakum 4,026 1,172 6.6% 10.2% 1 0.1% 2 0.1% 1.14

Walla Walla 57,721 31,568 5.4% 18.6% 64 0.2% 97 0.3% 1.51

Whatcom 185,953 105,951 4.5% 13.9% 195 0.2% 312 0.3% 1.60

Whitman 39,838 21,207 4.0% 26.6% 0 0.0% 1 0.0% n/a

Yakima 233,105 127,444 6.8% 21.5% 1,089 0.9% 1,612 1.3% 1.48

Washington 6,385,888 3,777,864 4.9% 12.0% 5,192 0.14% 8,427 0.22% 1.62

* Source: Washington State Employment Security Department (2007)

** Source: Department of Agriculture, Economic Research Service (2005)

# Washington State total does not equal the sum of the counties due to the fact that the multiplier effect is greater the larger the geographic and demographic entity beingconsidered.

Dobson | DaVanzo


A detailed examination of Table 13 follows:

Columns (1) to (5) present basic socio-economic statistics. Column (6) presents our estimates ofWA CHC System direct employment as gathered by our survey at the county and state level.

Column (7) shows how WA CHC System direct employment at 5,192 jobs represents 0.14% ofthe state total at 3.8 million jobs. County-level calculations in column (7) range from zero to onepercent. Column (9) presents the IMPLAN total employment multiplier by state and county. Theoverall state multiplier is 1.62.121 This means that WA CHC System spending produces 8,427jobs [see column (8)] in the state.

Column (9) shows total WA CHC System employment as a percent of county (state)employment. The overall state percent is 0.22 with county estimates ranging around the stateaverage; with some counties showing over one percent. Column (10) shows the employment(Jobs) multipliers.

We have conducted analyses that show the relationship of employment creation to populationdensities, percent unemployed and percent poverty. These analyses show that for every 1,000persons in a small county, WA CHC Systems create two jobs; in large counties, this number isone. Small is defined as less than 50 people per square mile and large is defined as more than100 people per square mile.

F. State/County WA CHC System Impact on Taxes

The state/county level tax calculations are presented in Table 14. WA CHC System economicactivity produces, in total, approximately $176 million in total taxes including $41 million instate and local taxes, and $134.6 million in federal taxes. Both of these estimates showconsiderable variation at the county level. These estimates indicate that WA CHC Systemexpenditures, which are primarily funded by sources external to their communities, generateimportant contributions to local community tax revenues, as well as federal tax revenues.

121 With a few exceptions, county employment multipliers tend to be lower than the overall state multiplier becauseof the fact that a person could work in one county and live in another. Some of that economic impact takes placeclose to work, and some of it take place close to home. Each county-level analysis only captures the effect of thatactivity which takes place in that county. The State level analysis captures activity in all counties.

Dobson | DaVanzo


Table 14: WA CHC System Impact on Taxes

CountyFederal

GovernmentState/LocalGovernment Total

(1) (2) (3) (4)

Adams $3,682,571 $1,200,284 $4,898,838

Asotin $245 $63 $308

Benton $2,443,152 $601,146 $3,053,558

Chelan $4,333,159 $1,290,090 $5,640,360

Clallam $26,032 $5,645 $31,774

Clark $887,941 $235,056 $1,126,134

Columbia $408 $78 $488

Cowlitz $2,550,962 $584,969 $3,145,468

Douglas $29,917 $5,839 $35,874

Ferry $60,799 $14,457 $75,539

Franklin $2,703,541 $608,725 $3,322,096

Garfield $18 $3 $21

Grant $3,232,116 $1,001,617 $4,246,571

Grays Harbor $387,154 $99,619 $488,237

Island $276,154 $71,031 $348,220

Jefferson $117,166 $24,010 $141,620

King $40,164,432 $11,902,642 $52,222,263

Kitsap $3,113,461 $815,391 $3,939,707

Kittitas $112,167 $30,065 $142,571

Klickitat $217,335 $38,239 $256,434

Lewis $1,073,892 $253,913 $1,331,707

Lincoln $69,081 $12,282 $81,630

Mason $825,567 $155,072 $983,727

Okanogan $1,559,869 $566,604 $2,132,470

Pacific $129,803 $29,814 $160,061

Pierce $9,012,882 $3,020,675 $12,065,346

Pend Oreille $229,488 $48,316 $278,714

San Juan $14,293 $3,671 $18,004

Skagit $1,840,205 $431,603 $2,278,367

Skamania $11,863 $2,221 $14,127

Snohomish $6,616,612 $1,805,815 $8,446,586

Spokane $9,815,688 $3,457,308 $13,309,746

Stevens $1,498,480 $390,792 $1,894,922

Thurston $3,792,962 $1,263,633 $5,069,673

Wahkiakum $3,923 $692 $4,630

Walla Walla $1,080,627 $347,381 $1,431,841

Whatcom $2,909,413 $790,648 $3,710,414

Whitman $7,046 $2,061 $9,138

Yakima $18,619,721 $5,662,996 $24,354,264

State Total $134,594,182 $40,993,175 $176,076,383

Source: Dobson | DaVanzo survey of Washington State Community HealthCenters: Financial and Employment Impact calculated using IMPLAN Software.

Dobson | DaVanzo


Discussion and Conclusion

The economic contribution of WA CHC System expenditures to local communities is importantfor a variety of reasons. The first set of reasons applies to the targeting and intent of the CHCprogram. We noted six contextual reasons why WA CHC System expenditures are important totheir communities in that:

Sizable expenditures are targeted to low-income, medically underserved and oftenrural areas.

Expenditure dollars are imported from outside of the community through federalgrants and public health care program spending.

The Medicaid federal match increases state economic leverage. Employment strengthens the communities’ social fabric by reducing

unemployment and poverty. Safety net care provision reduces local community hospital and physician bad

debt and charity care loads which strengthens provider finances and improvescare for all patients; not just WA CHC System patients.

Overall system costs are reduced as CHCs substitute less expensive primary carefor more expensive hospital care.

Our analyses next indicate within this contextual framework, that WA CHC System directexpenditures and direct employment represent a visible portion of local economies, particularlyof local health care economies with the overall state “multiplier” being 1.77 and the countymultipliers somewhat less. The county-level analyses show that in some instances WA CHCSystem expenditures represent between two to ten percent of local health care spending. This hasobvious workforce implications for effected communities as WA CHC System employees serveas mentors to local clinical staff, attract complementary clinical and professional staff into thecounty, and generally provide an environment conducive to overall economic development. Theprovision of clinical care which improves population health also bolsters the social fabric of thecommunity which stabilizes and improves the socio-demographics of communities.

The role of Medicaid deserves final mention. For every $1 expenditure of state supported,federally matched Medicaid by the WA CHC System, the state realizes $3.54 in total economicoutput. The implicit multiplier of 3.54 is an extremely powerful economic inducement for thestate to maintain, and, where possible, improve, CHC Medicaid reimbursement.

Dobson | DaVanzo


Appendix AWashington State CHC Stories: Contributions to the Collective Value

Columbia Basin Health AssociationColumbia Basin Health Association was one of four CHCs honored nationally for excellence inthe implementation of electronic health records (EHR) receiving the 2008 Davies Award fromthe Healthcare Information and Management Systems Society (HIMSS). Through their EHRinnovation, CBHA has been able to increase access to care, improve efficiencies and satisfaction,decrease costs and ultimately improve population health outcomes. This award recognizes carethat is open to all and predominantly to underserved populations such as the manymigrant/seasonal workers, uninsured and individuals whose income falls well below the federalpoverty level.

CBHA reports that through their adoption of electronic health records, they have been able toincrease provider productivity above national standards. In 2007, their family practicephysicians saw 1,390 more patients than the national average and their dentists had an average of1,821 more visits than the national average.

Columbia Valley Community HealthColumbia Valley Community Health provides medical, dental and behavioral health services forover 20,000 residents of Chelan and Douglas Counties totaling more than 94,000 encounters peryear.

Columbia Valley Community Health (CVCH) has a special interest in the provision ofbehavioral health services recognizing the higher prevalence of behavioral health issues inpatients living in poverty. In 2005, CVCH entered into a contract with the local RegionalSupport Network to provide specialty mental health services for adults and children. Servicesinclude psychiatric services; child, adolescent, and adult therapy; child, adolescent, and adultcase management; family and group therapy; 24-hour crisis services and involuntary treatmentevaluations. These services were previously provided by another non-profit clinic. Bringingthese community mental health services under the auspices of a community health center allowsmore dollars to be allocated to direct service delivery as opposed to administrative costs.

Community Health Association of SpokaneCommunity Health Association of Spokane conducted an informal survey to better understand itspatients. The survey found the following among employed patients who responded to the surveyquestion:

71.8 percent work for small companies (defined as 100 or less), 69.7 percent missed four or fewer days of work per year, and 82.8 percent support other family members with income from work.

Collectively, these findings suggest that the small businesses may also be beneficiaries of CHCefforts. While more study is needed, the high percentage of respondents who received care at aCHC and who worked for small businesses suggests that CHCs enable small businesses to have ahealthy workforce without direct health care expenditures. Further, the support provided to

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family members suggests interdependence between small businesses, employees, and families isalso strengthened by the efforts of CHCs.

Community Health CareCommunity Health Care operates nine medical and two dental clinics serving Pierce County’smost vulnerable citizens. Maintaining professional staff to provide care in these clinics is aconsistent and growing challenge. The availability of Loan Repayment is critical to our presentretention of providers and to the recruitment of professionals to fill currently vacant positions.Currently, Community Health Care has applied for Loan Repayment for 16 existing employees,and hopes to use the program as a recruiting incentive for 11 additional providers.

Dr. Jeff Smith, Medical Director, stated, “Loan repayment allows us to offer a competitive salaryto attract and retain doctors. It also brings us providers who only want the loan repayment, butthen find a real passion for ‘community health’ and decide to stay. That’s how I got toCommunity Health Care and now I am the Medical Director and the chief proponent of‘community health.’”

Community Health Center of Snohomish CountyCommunity Health Center of Snohomish County is improving the quality of care for diabetespatients utilizing the Chronic Care Model. CHC management supports a multi-disciplinary teamto develop diabetes group visits which focus on assisting each patient to move closer to theirdiabetes care goals. At each group visit, attention is focused on diabetes self managementeducation. Patients may also participate in a monthly diabetes prevention support group whichassists them in maintaining and setting new life style goals. In addition, CHC of SnohomishCounty has implemented an electronic medical record (EMR) system which enables staff tobetter track diabetes care resulting in improved follow up.

Community Health of Central WashingtonThe Central Washington Family Medicine Residency Program is a service of Community Healthof Central Washington (CHCW). As such, the residency program is committed to thedevelopment of excellent, board-certified family physicians with demonstrated clinical, technicaland interpersonal competencies. In keeping with CHCW’s focus on service to underservedpopulations, the residency program curriculum encompasses full spectrum family medicineincluding obstetrics and inpatient care. The program is accredited by both the AccreditationCouncil for Graduate Medical Education and the American Osteopathic Association.

CHCW and the Yakima community are well suited to provide a rich learning environment forfamily physicians—the patient population of CHCW represents the cultural, socioeconomic, anddemographic diversity of the Yakima Valley and the community is a regional referral center formedical services. Collaborative projects in the community include staffing a needle exchangeprogram for the Public Health Department, an obstetrics clinic at Yakima Neighborhood HealthServices, educating dental residents from the University of Washington and Yakima Valley FarmWorkers Clinic pediatric dentistry program, and providing clinical rotations for medical students.Of the program’s 84 graduates, nearly 30% are practicing in the Yakima Valley and itssurrounding rural communities.

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Country Doctor Community Health CentersCountry Doctor Community Health Centers (CDCHC) provides primary medical care to alargely uninsured population. CDCHC sees its role as not only providing acute care, chronicdisease management and preventive care and education, but as an entry point into the largermedical system. Critical services such as pharmacy, behavioral health, social work andnutritional counseling are offered on site as well as access to acupuncture and naturopathyprograms. Interpretation services and transportation are available to all CDCHC patients whenneeded.

CDCHC programs include those targeted to special populations such as the homeless and peoplewho are HIV+. CDCHC nursing staff provides care at several local family shelters and a clinicfocused on caring for homeless youth. Due to strong community need, CDCHC developedexpertise in the identification and care of HIV+ patients early in the AIDS epidemic. CDCHC’sHIV program integrates medical care with nurse case management, adherence counseling, socialcase management as well as testing and early diagnosis. CDCHC works closely with the localhealth department and other HIV-focused agencies to provide comprehensive care to those withHIV and AIDS.

Cowlitz Family Health CenterCowlitz Family Health Center has demonstrated that patient care, like economic impact, can be“multiplied” throughout the community. A strategic alliance was developed with two otherorganizations that better integrated mental health care and substance abuse treatment withphysical health services. Out of this relationship emerged a short term pilot project thatexamined the feasibility of placing a Behavioral Health Consultant in the main primary careclinic site. This pilot project proved successful, even though limited in scope, and solidified theneed for moving forward and creating a permanent Behavioral Health Consultant positionsupporting primary care providers.

Family Health CentersFamily Health Centers launched ¡Familia y Salud! to increase migrant/seasonal farm workers’access to comprehensive health services and information. Particularly noteworthy is the use ofradio to inform target populations of preventive activities, including “Heat Related Illnesses,”and “Ladder Safety.”

In addition to the community health benefits, ¡Familia y Salud! brings external funding into thecommunity through a multi-year federal grant. Family Health Centers plans to sustain theprogram through multiple funding sources, including private foundations, corporate giving andindividual contributions.

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HealthPointHealthPoint, located in King County, serves nearly 50,000 patients with a mission to bring thecommunity affordable, quality health care. As an organization they are also committed tocreating career ladders for community members. One example of this commitment in practice isthe story of a staff member who started as an interpreter in 2001. She had grown up in thecommunity served by the CHC, attending Highline High School and Highline CommunityCollege where she graduated with an AA degree. After working in community based health andsocial services programs, she found her way to HealthPoint. Through her abilities and thesupport of the CHC, she moved up the ladder and became a Client Service Representative andthen the Manager of one of the CHC's clinics. She now helps to ensure that the care delivered toher community is responsive and relevant

Interfaith Community Health CenterIn 2006, Interfaith Community Health Center (ICHC) in Northwestern Washington implementeda program to follow-up on every ICHC patient presenting at the Emergency Department (ED) forservices. The local hospital sends a daily report of ED patients who identify an ICHC provideras their primary care provider (PCP). This information is entered into a database on all ICHCED users that includes patient name, PCP, number of visits per month—noting how many areafter hours and during clinic hours, insurance type and reason for ED visit.

Patients are contacted after their first and second ED visits within a year for follow-up. Themessage to patients is about same-day access, expanded hours, limited holiday closures, theafter-hours nurse help line, the cost of an ED visit vs. an ICHC visit, and the shorter wait time atthe clinic. ICHC recently received one of four federal grants in Washington State to reduceunnecessary ED utilization.

International Community Health ServicesInternational Community Health Services serves a diverse mix of patients. To respond to patientneeds, ICHS provides outreach, services, and publications in multiple languages.Noteworthy is ICHS’ Diabetes Education Program. In addition to educational classes andsupport groups, ICHS produces cookbooks with “traditional Asian recipes that have beenmodified to reduce fat, sugar, and salt content.” These cookbooks are printed in Chinese,Khmer, Korean, Tagalog and Vietnamese, with English translations.

Metropolitan Development CouncilOver the last 21 years Metropolitan Development Council’s (MDC) Health Care for theHomeless Project (HCH) has established a robust network of partners who bring together anarray of resources and services in meeting the extraordinary medical and psycho-social needs ofTacoma’s homeless population. HCH functions as the hub of this network, integrating primarycare, behavioral health, dental, case management, outreach, pharmacy, and housing assistanceservices. HCH works diligently to assure that the project’s providers view themselves as part ofa multi-disciplinary team committed to the patient-centered model of care that is the hallmark ofsuccessful HCH projects around the nation.

In recruiting partners, MDC seeks to leverage resources that directly relate to the uniqueobstacles to health and recovery that are common among the homeless population. Theseobstacles include transportation issues; barriers to benefits coverage and other challenges in

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obtaining care at community health centers or other traditional primary care providers; mistrustof mainstream institutions; and high rates of co-occurring serious mental illness.

Moses Lake Community Health CenterMoses Lake Community Health Centers offers a prevention and patient education program at theQuincy clinic featuring the Promotores de Salud model. Their promotores are a trained pool ofnatural community leaders who are effective because they incorporate health care informationwith their culture and language. This enables them to take complex health practices and issues totarget populations making them understandable and less daunting to their patients.

With a strong volunteer base, the organization has to be creative and resourceful. The Quincyclinic’s need for volunteers or promotores and the local students’ need for community serviceprojects has become a perfect match. Participating youth often report that their work aspromotores has helped them discover unknown path roads which have etched a significantpassion for their future goals in the health arena. The partnership with the youth in thecommunity has not only improved health care services, but is creating the next generation ofhealth care professionals.

Neighborcare HealthNeighborcare Health in Seattle has a strong legacy of community investment. Their High PointMedical and Dental Clinic is a landmark for the revitalization of the new High Point Community.Located adjacent to a new Seattle Public Library, it was the first new building to come on line aswork on the Hope VI mixed-income community sprang up in West Seattle.

Neighborcare Health is also the largest operator of school-based teen health centers in Seattle.Offering a mixture of physical and mental health services, these clinics are located in the schoolsand have proven to be a vital resource for students of all socioeconomic backgrounds. Overfifteen years, the impact on student safety, health and (indirectly) academics is remarkable. Formany students, the relationship with school-based health center staff is their strongest health careconnection. In conjunction with other Neighborcare Health clinics, the center staff providesstudents access to a health care home that is in touch with their unique needs as adolescents.

In conjunction with other community providers and Public Health - Seattle and King County,Neighborcare Health is the largest provider of health care services to the homeless population inSeattle. Outreach workers, nurses and other providers make the rounds of dozens of shelters andgathering places for homeless people, attending to their health care needs on the spot. As a result,homeless people have a better chance at ultimate success in making their way back to beingcontributing members of society and living successfully under their own roof.

NE Washington Health ProgramNE Washington Health Program’s rural/frontier medical, dental, home health and hospiceprograms provide access to health care in areas where people have a difficult time traveling dueto geography and climate – covering over 6000 square miles. Due to the remoteness, lowpopulation, and high level of uninsured and Medicaid patients, no other organizations wereserving these communities. Thirty years ago, NEWHP stepped up to meet the access needs ofthese residents. NEWHP’s mission is to address the issues of accessibility to primary care, cost

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of care, coordination of services, quality of care, and lack of specific health care servicesavailable in the Northeast Washington.

Peninsula Community Health ServicesPeninsula Community Health Services (PCHS) launched Kitsap Partnership for Access to HealthCare Services to integrate the disciplines of behavioral health and physical health. PCHS reportsincreased productivity, better acculturation between disciplines, and enhanced patient comfortwith their medical home. In addition, PCHS partners with six health, law enforcement and socialservice agencies in establishing the Kitsap County Behavioral Health Alliance to focus on waysto improve mental health services in Kitsap County. They also received and implemented a two-year, $125,000 Community Health Care Collaborative grant to integrate behavioral healthservices in primary care clinics.

Seattle Indian Health BoardThe Seattle Indian Health Board (SIHB) is the oldest and largest Urban Indian Health Program inthe country. Because substance abuse, particularly alcohol, remains a major health problemfaced by Indian communities, SIHB has focused on substance abuse treatment as an integral partof their work.

SIHB started offering substance abuse treatment through outreach and community events in1972. Two years later, the agency opened Thunderbird House, a 15-bed residential treatmentcenter. Today, Thunderbird Treatment Center has grown to the largest residential substanceabuse treatment program in Washington State—now housing over 90 clients daily. Residents ofThunderbird have access to all services of the SIHB. Most remain clients of the SIHB aftergraduating from both Thunderbird and outpatient programs.

Sea Mar Community Health CentersSea Mar Community Health Centers serves the largest geographic area of any Washington CHCwith clinics in Whatcom, Skagit, Snohomish, King, Pierce, Thurston, Grays Harbor, Island andClark Counties. In addition to providing medical and dental care, they have expanded servicesthat offer behavioral treatment centers, home health care, preventive health services, skillednursing facilities and housing programs.

Sea Mar is proud to have the only nationally certified internship program for registered dieticiansin Washington. It allows Bachelors of Science level nutritionist to do a required nine monthinternship program before taking the exam to become a Registered Dietician. Sea Mar madecertification a priority to allow the program to provide training and opportunity tobilingual/bicultural individuals. There are six interns every year who submit applications fromaround the country.

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Valley View Health CenterValley View Health Center is the result of a two year study by the local Providence Hospital andthe Lewis County Health Partnership. Enormous demand for charity care led Providence andother community members to identity a more effective way to provide care to vulnerablepopulations. Since opening its first facility in 2004, Valley View Health Center has grownrapidly to serve multiple rural communities. From one facility donated by Providence, ValleyView Health Center currently operates four clinics and has additional expansion effortsunderway.

Yakima Neighborhood Health ServicesNeighborhood Connections, a program of Yakima Neighborhood Health Services, actively seeksto provide homeless individuals with basic health care needs. In 2006, YNHS discovered thatvery few of their patients were identifying themselves as homeless and applied for a federal grantto bring health care to the streets and shelters in the community. Unique to NeighborhoodConnections is the outreach component and relationship building between individual patients andhealth care providers. Many homeless people have multiple health problems and creatingconnections with care providers can result in reduced costs in treating the homeless in hospitalemergency rooms. In a given year, YNHS will provide care for over 1,700 individuals in roughly5,300 encounters.

Yakima Valley Farm Workers Clinic

In 2005, the state invested funds to launch the Northwest Dental Residency (NDR) program atYakima Valley Farm Workers Clinic. The following year, it became the first civilian AdvancedEducation in General Dentistry Residency program in Washington and one of the few to bebased out of a CHC. In 2007, the program expanded to two additional community health centersand is now training dental residents in seven Washington communities.

The NDR program has been successful in both training graduates and providing needed care tounderserved communities. Twelve dental residents have completed the program and 12 more arecurrently training. Since the program’s inception, dental residents have provided care for 7,840patients. Nearly 8 out of every 10 of these patients live in extreme poverty.

The NDR program has increased the number of dentists working in community dentistry. Mostof the NDR graduates are working in dental health professional shortage areas and one-fourth areworking in CHCs.

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Appendix BLegislative Definitions and Requirements of Community Health Centers

Section 330 of the Public Health Service Act (42 USCS § 254b)122

Authorizing Legislation of the Health Center Program

(a) Definition of health center.

(1) In general. For purposes of this section, the term "health center" means an entity thatserves a population that is medically underserved, or a special medically underservedpopulation comprised of migratory and seasonal agricultural workers, the homeless, andresidents of public housing, by providing, either through the staff and supportingresources of the center or through contracts or cooperative arrangements --

(A) required primary health services (as defined in subsection (b)(1)); and (B) as may be appropriate for particular centers, additional health services (as

defined in subsection (b)(2)) necessary for the adequate support of the primaryhealth services required under subparagraph (A);for all residents of the area served by the center (hereafter referred to in thissection as the "catchment area").

(2) Limitation. The requirement in paragraph (1) to provide services for all residentswithin a catchment area shall not apply in the case of a health center receiving a grantonly under subsection (g), (h), or (i).

(b) Definitions. For purposes of this section:

(1) Required primary health services.

(A) In general. The term "required primary health services" means--o (i) basic health services which, for purposes of this section, shall consist

of-- (I) health services related to family medicine, internal medicine,

pediatrics, obstetrics, or gynecology that are furnished byphysicians and where appropriate, physician assistants, nursepractitioners, and nurse midwives;

(II) diagnostic laboratory and radiologic services; (III) preventive health services, including--

122 Source: http://bphc.hrsa.gov/about/legislation/section330.htm

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(aa) prenatal and perinatal services; (bb) appropriate cancer screening; (cc) well-child services; (dd) immunizations against vaccine-preventable diseases; (ee) screenings for elevated blood lead levels,

communicable diseases, and cholesterol; (ff) pediatric eye, ear, and dental screenings to determine

the need for vision and hearing correction and dental care; (gg) voluntary family planning services; and (hh) preventive dental services;

(IV) emergency medical services; and (V) pharmaceutical services as may be appropriate for particular

centers;o (ii) referrals to providers of medical services (including specialty referral

when medically indicated) and other health-related services (includingsubstance abuse and mental health services);

o (iii) patient case management services (including counseling, referral, andfollow-up services) and other services designed to assist health centerpatients in establishing eligibility for and gaining access to Federal, State,and local programs that provide or financially support the provision ofmedical, social, housing, educational, or other related services;

o (iv) services that enable individuals to use the services of the healthcenter (including outreach and transportation services and, if a substantialnumber of the individuals in the population served by a center are oflimited English-speaking ability, the services of appropriate personnelfluent in the language spoken by a predominant number of suchindividuals); and

o (v) education of patients and the general population served by the healthcenter regarding the availability and proper use of health services.

(B) Exception. With respect to a health center that receives a grant only undersubsection (g), the Secretary, upon a showing of good cause, shall--

o (i) waive the requirement that the center provide all required primaryhealth services under this paragraph; and

o (ii) approve, as appropriate, the provision of certain required primaryhealth services only during certain periods of the year.

(2) Additional health services. The term "additional health services" means servicesthat are not included as required primary health services and that are appropriate to meetthe health needs of the population served by the health center involved. Such term mayinclude--

(A) behavioral and mental health and substance abuse services; (B) recuperative care services;

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(C) environmental health services, including--o (i) the detection and alleviation of unhealthful conditions associated with-

- (I) water supply; (II) chemical and pesticide exposures; (III) air quality; or (IV) exposure to lead;

o (ii) sewage treatment;o (iii) solid waste disposal;o (iv) rodent and parasitic infestation;o (v) field sanitation;o (vi) housing; ando (vii) other environmental factors related to health;and

(D) in the case of health centers receiving grants under subsection (g), specialoccupation-related health services for migratory and seasonal agriculturalworkers, including--

o (i) screening for and control of infectious diseases, including parasiticdiseases; and

o (ii) injury prevention programs, including prevention of exposure tounsafe levels of agricultural chemicals including pesticides.

(3) Medically underserved populations.

(A) In general. The term "medically underserved population" means thepopulation of an urban or rural area designated by the Secretary as an area with ashortage of personal health services or a population group designated by theSecretary as having a shortage of such services.

(B) Criteria. In carrying out subparagraph (A), the Secretary shall prescribecriteria for determining the specific shortages of personal health services of anarea or population group. Such criteria shall--

o (i) take into account comments received by the Secretary from the chiefexecutive officer of a State and local officials in a State; and

o (ii) include factors indicative of the health status of a population group orresidents of an area, the ability of the residents of an area or of apopulation group to pay for health services and their accessibility tothem, and the availability of health professionals to residents of an area orto a population group.

(C) Limitation. The Secretary may not designate a medically underservedpopulation in a State or terminate the designation of such a population unless,prior to such designation or termination, the Secretary provides reasonable noticeand opportunity for comment and consults with--

o (i) the chief executive officer of such State;o (ii) local officials in such State; and

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o (iii) the organization, if any, which represents a majority of health centersin such State.

(D) Permissible designation. The Secretary may designate a medicallyunderserved population that does not meet the criteria established undersubparagraph (B) if the chief executive officer of the State in which suchpopulation is located and local officials of such State recommend the designationof such population based on unusual local conditions which are a barrier toaccess to or the availability of personal health services.

(c) Planning grants.

(1) In general.

(A) Centers. The Secretary may make grants to public and nonprofit privateentities for projects to plan and develop health centers which will servemedically underserved populations. A project for which a grant may be madeunder this subsection may include the cost of the acquisition and lease ofbuildings and equipment (including the costs of amortizing the principal of, andpaying the interest on, loans) and shall include--

o (i) an assessment of the need that the population proposed to be served bythe health center for which the project is undertaken has for requiredprimary health services and additional health services;

o (ii) the design of a health center program for such population based onsuch assessment;

o (iii) efforts to secure, within the proposed catchment area of such center,financial and professional assistance and support for the project;

o (iv) initiation and encouragement of continuing community involvementin the development and operation of the project; and

o (v) proposed linkages between the center and other appropriate providerentities, such as health departments, local hospitals, and rural healthclinics, to provide better coordinated, higher quality, and more cost-effective health care services.

(B) Managed care networks and plans. The Secretary may make grants to healthcenters that receive assistance under this section to enable the centers to plan anddevelop a managed care network or plan. Such a grant may only be made forsuch a center if--

o (i) the center has received grants under subsection (e)(1)(A) for at least 2consecutive years preceding the year of the grant under this subparagraphor has otherwise demonstrated, as required by the Secretary, that suchcenter has been providing primary care services for at least the 2consecutive years immediately preceding such year; and

o (ii) the center provides assurances satisfactory to the Secretary that the

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provision of such services on a prepaid basis, or under another managedcare arrangement, will not result in the diminution of the level or qualityof health services provided to the medically underserved populationserved prior to the grant under this subparagraph.

(C) Practice management networks. The Secretary may make grants to healthcenters that receive assistance under this section to enable the centers to plan anddevelop practice management networks that will enable the centers to--

o (i) reduce costs associated with the provision of health care services;o (ii) improve access to, and availability of, health care services provided to

individuals served by the centers;o (iii) enhance the quality and coordination of health care services; oro (iv) improve the health status of communities.

(D) Use of funds. The activities for which a grant may be made undersubparagraph (B) or (C) may include the purchase or lease of equipment, whichmay include data and information systems (including paying for the costs ofamortizing the principal of, and paying the interest on, loans for equipment), theprovision of training and technical assistance related to the provision of healthcare services on a prepaid basis or under another managed care arrangement, andother activities that promote the development of practice management ormanaged care networks and plans.

(2) Limitation. Not more than two grants may be made under this subsection for thesame project, except that upon a showing of good cause, the Secretary may makeadditional grant awards.

(d) Loan guarantee program.

(1) Establishment.

(A) In general. The Secretary shall establish a program under which theSecretary may, in accordance with this subsection and to the extent thatappropriations are provided in advance for such program, guarantee up to 90percent of the principal and interest on loans made by non-Federal lenders tohealth centers, funded under this section, for the costs of developing andoperating managed care networks or plans described in subsection (c)(1)(B), orpractice management networks described in subsection (c)(1)(C).

(B) Use of funds. Loan funds guaranteed under this subsection may be used--o (i) to establish reserves for the furnishing of services on a pre-paid basis;o (ii) for costs incurred by the center or centers, otherwise permitted under

this section, as the Secretary determines are necessary to enable a centeror centers to develop, operate, and own the network or plan; or

o (iii) to refinance an existing loan (as of the date of refinancing) to the

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center or centers, if the Secretary determines-- (I) that such refinancing will be beneficial to the health center and

the Federal Government; (II) that the center (or centers) can demonstrate an ability to repay

the refinanced loan equal to or greater than the ability of thecenter (or centers) to repay the original loan on the date theoriginal loan was made.

(C) Publication of guidance. Prior to considering an application submitted underthis subsection, the Secretary shall publish guidelines to provide guidance on theimplementation of this section. The Secretary shall make such guidelinesavailable to the universe of parties affected under this subsection, distribute suchguidelines to such parties upon the request of such parties, and provide a copy ofsuch guidelines to the appropriate committees of Congress.

(D) Provision directly to networks or plans. At the request of health centersreceiving assistance under this section, loan guarantees provided under thisparagraph may be made directly to networks or plans that are at least majoritycontrolled and, as applicable, at least majority owned by those health centers.

(E) Federal credit reform. The requirements of the Federal Credit Reform Act of1990 (2 U.S.C. 661 et seq.) shall apply with respect to loans refinanced undersubparagraph (B)(iii).

(2) Protection of financial interests.

(A) In general. The Secretary may not approve a loan guarantee for a projectunder this subsection unless the Secretary determines that--

o (i) the terms, conditions, security (if any), and schedule and amount ofrepayments with respect to the loan are sufficient to protect the financialinterests of the United States and are otherwise reasonable, including adetermination that the rate of interest does not exceed such percent perannum on the principal obligation outstanding as the Secretarydetermines to be reasonable, taking into account the range of interestrates prevailing in the private market for similar loans and the risksassumed by the United States, except that the Secretary may not requireas security any center asset that is, or may be, needed by the center orcenters involved to provide health services;

o (ii) the loan would not be available on reasonable terms and conditionswithout the guarantee under this subsection; and

o (iii) amounts appropriated for the program under this subsection aresufficient to provide loan guarantees under this subsection.

(B) Recovery of payments.o (i) In general. The United States shall be entitled to recover from the

applicant for a loan guarantee under this subsection the amount of anypayment made pursuant to such guarantee, unless the Secretary for good

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cause waives such right of recovery (subject to appropriations remainingavailable to permit such a waiver) and, upon making any such payment,the United States shall be subrogated to all of the rights of the recipient ofthe payments with respect to which the guarantee was made. Amountsrecovered under this clause shall be credited as reimbursements to thefinancing account of the program.

o (ii) Modification of terms and conditions. To the extent permitted byclause (iii) and subject to the requirements of section 504(e) of the CreditReform Act of 1990 (2 U.S.C. 661c(e)), any terms and conditionsapplicable to a loan guarantee under this subsection (including terms andconditions imposed under clause (iv)) may be modified or waived by theSecretary to the extent the Secretary determines it to be consistent withthe financial interest of the United States.

o (iii) Incontestability. Any loan guarantee made by the Secretary underthis subsection shall be incontestable--

(I) in the hands of an applicant on whose behalf such guarantee ismade unless the applicant engaged in fraud or misrepresentationin securing such guarantee; and

(II) as to any person (or successor in interest) who makes orcontracts to make a loan to such applicant in reliance thereonunless such person (or successor in interest) engaged in fraud ormisrepresentation in making or contracting to make such loan.

o (iv) Further terms and conditions. Guarantees of loans under thissubsection shall be subject to such further terms and conditions as theSecretary determines to be necessary to assure that the purposes of thissection will be achieved.

(3) Loan origination fees.

(A) In general. The Secretary shall collect a loan origination fee with respect toloans to be guaranteed under this subsection, except as provided in subparagraph(C).

(B) Amount. The amount of a loan origination fee collected by the Secretaryunder subparagraph (A) shall be equal to the estimated long term cost of the loanguarantees involved to the Federal Government (excluding administrative costs),calculated on a net present value basis, after taking into account anyappropriations that may be made for the purpose of offsetting such costs, and inaccordance with the criteria used to award loan guarantees under this subsection.

(C) Waiver. The Secretary may waive the loan origination fee for a health centerapplicant who demonstrates to the Secretary that the applicant will be unable tomeet the conditions of the loan if the applicant incurs the additional cost of thefee.

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(4) Defaults.

(A) In general. Subject to the requirements of the Credit Reform Act of 1990 (2U.S.C. 661 et seq.), the Secretary may take such action as may be necessary toprevent a default on a loan guaranteed under this subsection, including thewaiver of regulatory conditions, deferral of loan payments, renegotiation ofloans, and the expenditure of funds for technical and consultative assistance, forthe temporary payment of the interest and principal on such a loan, and for otherpurposes. Any such expenditure made under the preceding sentence on behalf ofa health center or centers shall be made under such terms and conditions as theSecretary shall prescribe, including the implementation of such organizational,operational, and financial reforms as the Secretary determines are appropriateand the disclosure of such financial or other information as the Secretary mayrequire to determine the extent of the implementation of such reforms.

(B) Foreclosure. The Secretary may take such action, consistent with State lawrespecting foreclosure procedures and, with respect to reserves required forfurnishing services on a prepaid basis, subject to the consent of the affectedStates, as the Secretary determines appropriate to protect the interest of theUnited States in the event of a default on a loan guaranteed under this subsection,except that the Secretary may only foreclose on assets offered as security (if any)in accordance with paragraph (2)(A)(i).

(5) Limitation. Not more than one loan guarantee may be made under this subsectionfor the same network or plan, except that upon a showing of good cause the Secretarymay make additional loan guarantees.

(6) Authorization of appropriations. There are authorized to be appropriated tocarryout this subsection such sums as may be necessary.

(e) Operating grants.

(1) Authority.

(A) In general. The Secretary may make grants for the costs of the operation ofpublic and nonprofit private health centers that provide health services tomedically underserved populations.

(B) Entities that fail to meet certain requirements. The Secretary may makegrants, for a period of not to exceed 2 years, for the costs of the operation ofpublic and nonprofit private entities which provide health services to medicallyunderserved populations but with respect to which the Secretary is unable to

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make each of the determinations required by subsection (k)(3) [(l)(3)]. (C) Operation of networks and plans. The Secretary may make grants to health

centers that receive assistance under this section, or at the request of the healthcenters, directly to a network or plan (as described in subparagraphs (B) and (C)of subsection (c)(1)) that is at least majority controlled and, as applicable, at leastmajority owned by such health centers receiving assistance under this section, forthe costs associated with the operation of such network or plan, including thepurchase or lease of equipment (including the costs of amortizing the principalof, and paying the interest on, loans for equipment).

(2) Use of funds. The costs for which a grant may be made under subparagraph (A) or(B) of paragraph (1) may include the costs of acquiring and leasing buildings andequipment (including the costs of amortizing the principal of, and paying interest on,loans), and the costs of providing training related to the provision of required primaryhealth services and additional health services and to the management of health centerprograms.

(3) Construction. The Secretary may award grants which may be used to pay the costsassociated with expanding and modernizing existing buildings or constructing newbuildings (including the costs of amortizing the principal of, and paying the interest on,loans) for projects approved prior to October 1, 1996.

[(4)](3) Limitation. Not more than two grants may be made under subparagraph (B) ofparagraph (1) for the same entity.

[(5)](4) Amount.

(A) In general. The amount of any grant made in any fiscal year undersubparagraphs (A) and (B) of paragraph (1) to a health center shall bedetermined by the Secretary, but may not exceed the amount by which the costsof operation of the center in such fiscal year exceed the total of--(i) State, local, and other operational funding provided to the center; and(ii) the fees, premiums, and third-party reimbursements, which the center mayreasonably be expected to receive for its operations in such fiscal year.

(B) Networks and plans. The total amount of grant funds made available for anyfiscal year under paragraph (1)(C) and subparagraphs (B) and (C) of subsection(c)(1) to a health center or to a network or plan shall be determined by theSecretary, but may not exceed 2 percent of the total amount appropriated underthis section for such fiscal year.

(C) Payments. Payments under grants under subparagraph (A) or (B) of

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paragraph (1) shall be made in advance or by way of reimbursement and in suchinstallments as the Secretary finds necessary and adjustments may be made foroverpayments or underpayments.

(D) Use of nongrant funds. Nongrant funds described in clauses (i) and (ii) ofsubparagraph (A), including any such funds in excess of those originallyexpected, shall be used as permitted under this section, and may be used for suchother purposes as are not specifically prohibited under this section if such usefurthers the objectives of the project.

(f) Infant mortality grants.

(1) In general. The Secretary may make grants to health centers for the purpose ofassisting such centers in--

(A) providing comprehensive health care and support services for the reductionof--

o (i) the incidence of infant mortality; ando (ii) morbidity among children who are less than 3 years of age; and

(B) developing and coordinating service and referral arrangements betweenhealth centers and other entities for the health management of pregnant womenand children described in subparagraph (A).

(2) Priority. In making grants under this subsection the Secretary shall give priority tohealth centers providing services to any medically underserved population among whichthere is a substantial incidence of infant mortality or among which there is a significantincrease in the incidence of infant mortality.

(3) Requirements. The Secretary may make a grant under this subsection only if thehealth center involved agrees that--

(A) the center will coordinate the provision of services under the grant to each ofthe recipients of the services;

(B) such services will be continuous for each such recipient; (C) the center will provide follow-up services for individuals who are referred by

the center for services described in paragraph (1); (D) the grant will be expended to supplement, and not supplant, the expenditures

of the center for primary health services (including prenatal care) with respect tothe purpose described in this subsection; and

(E) the center will coordinate the provision of services with other maternal and

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child health providers operating in the catchment area.

(g) Migratory and seasonal agricultural workers.

(1) In general. The Secretary may award grants for the purposes described insubsections (c), (e), and (f) for the planning and delivery of services to a specialmedically underserved population comprised of--

(A) migratory agricultural workers, seasonal agricultural workers, and membersof the families of such migratory and seasonal agricultural workers who arewithin a designated catchment area; and

(B) individuals who have previously been migratory agricultural workers butwho no longer meet the requirements of subparagraph (A) of paragraph (3)because of age or disability and members of the families of such individuals whoare within such catchment area.

(2) Environmental concerns. The Secretary may enter into grants or contracts underthis subsection with public and private entities to--

(A) assist the States in the implementation and enforcement of acceptableenvironmental health standards, including enforcement of standards forsanitation in migratory agricultural worker and seasonal agricultural workerlabor camps, and applicable Federal and State pesticide control standards; and

(B) conduct projects and studies to assist the several States and entities whichhave received grants or contracts under this section in the assessment ofproblems related to camp and field sanitation, exposure to unsafe levels ofagricultural chemicals including pesticides, and other environmental healthhazards to which migratory agricultural workers and seasonal agriculturalworkers, and members of their families, are exposed.

(3) Definitions. For purposes of this subsection:

(A) Migratory agricultural worker. The term "migratory agricultural worker"means an individual whose principal employment is in agriculture, who has beenso employed within the last 24 months, and who establishes for the purposes ofsuch employment a temporary abode.

(B) Seasonal agricultural worker. The term "seasonal agricultural worker" meansan individual whose principal employment is in agriculture on a seasonal basisand who is not a migratory agricultural worker.

(C) Agriculture. The term "agriculture" means farming in all its branches,

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including--o (i) cultivation and tillage of the soil;o (ii) the production, cultivation, growing, and harvesting of any

commodity grown on, in, or as an adjunct to or part of a commoditygrown in or on, the land; and

o (iii) any practice (including preparation and processing for market anddelivery to storage or to market or to carriers for transportation to market)performed by a farmer or on a farm incident to or in conjunction with anactivity described in clause (ii).

(h) Homeless population.

(1) In general. The Secretary may award grants for the purposes described insubsections (c), (e), and (f) for the planning and delivery of services to a specialmedically underserved population comprised of homeless individuals, including grantsfor innovative programs that provide outreach and comprehensive primary healthservices to homeless children and youth and children and youth at risk of homelessness.

(2) Required services. In addition to required primary health services (as defined insubsection (b)(1)), an entity that receives a grant under this subsection shall be requiredto provide substance abuse services as a condition of such grant.

(3) Supplement not supplant requirement. A grant awarded under this subsectionshall be expended to supplement, and not supplant, the expenditures of the health centerand the value of in kind contributions for the delivery of services to the populationdescribed in paragraph (1).

(4) Temporary continued provision of services to certain former homelessindividuals. If any grantee under this subsection has provided services described in thissection under the grant to a homeless individual, such grantee may, notwithstanding thatthe individual is no longer homeless as a result of becoming a resident in permanenthousing, expend the grant to continue to provide such services to the individual for notmore than 12 months.

(5) Definitions. For purposes of this section:

(A) Homeless individual. The term "homeless individual" means an individualwho lacks housing (without regard to whether the individual is a member of a

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family), including an individual whose primary residence during the night is asupervised public or private facility that provides temporary livingaccommodations and an individual who is a resident in transitional housing.

(B) Substance abuse. The term "substance abuse" has the same meaning givensuch term in section 534(4) [42 USCS § 290cc-34(4)].

(C) Substance abuse services. The term "substance abuse services" includesdetoxification, risk reduction, outpatient treatment, residential treatment, andrehabilitation for substance abuse provided in settings other than hospitals.

(i) Residents of public housing.

(1) In general. The Secretary may award grants for the purposes described insubsections (c), (e), and (f) for the planning and delivery of services to a specialmedically underserved population comprised of residents of public housing (such term,for purposes of this subsection, shall have the same meaning given such term in section3(b)(1) of the United States Housing Act of 1937 [42 USCS § 1437a(b)(1)]) andindividuals living in areas immediately accessible to such public housing.

(2) Supplement not supplant. A grant awarded under this subsection shall be expendedto supplement, and not supplant, the expenditures of the health center and the value of inkind contributions for the delivery of services to the population described in paragraph(1).

(3) Consultation with residents. The Secretary may not make a grant under paragraph(1) unless, with respect to the residents of the public housing involved, the applicant forthe grant--

(A) has consulted with the residents in the preparation of the application for thegrant; and

(B) agrees to provide for ongoing consultation with the residents regarding theplanning and administration of the program carried out with the grant.

(j) Access grants.

(1) In general. The Secretary may award grants to eligible health centers with asubstantial number of clients with limited English speaking proficiency to providetranslation, interpretation, and other such services for such clients with limited English

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speaking proficiency.

(2) Eligible health center. In this subsection, the term "eligible health center" means anentity that--

(A) is a health center as defined under subsection (a); (B) provides health care services for clients for whom English is a second

language; and (C) has exceptional needs with respect to linguistic access or faces exceptional

challenges with respect to linguistic access.

(3) Grant amount. The amount of a grant awarded to a center under this subsectionshall be determined by the Administrator. Such determination of such amount shall bebased on the number of clients for whom English is a second language that is served bysuch center, and larger grant amounts shall be awarded to centers serving larger numbersof such clients.

(4) Use of funds. An eligible health center that receives a grant under this subsectionmay use funds received through such grant to--

(A) provide translation, interpretation, and other such services for clients forwhom English is a second language, including hiring professional translation andinterpretation services; and

(B) compensate bilingual or multilingual staff for language assistance servicesprovided by the staff for such clients.

(5) Application. An eligible health center desiring a grant under this subsection shallsubmit an application to the Secretary at such time, in such manner, and containing suchinformation as the Secretary may reasonably require, including--

(A) an estimate of the number of clients that the center serves for whom Englishis a second language;

(B) the ratio of the number of clients for whom English is a second language tothe total number of clients served by the center;

(C) a description of any language assistance services that the center proposes toprovide to aid clients for whom English is a second language; and

(D) a description of the exceptional needs of such center with respect tolinguistic access or a description of the exceptional challenges faced by suchcenter with respect to linguistic access.

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(6) Authorization of appropriations. There are authorized to be appropriated to carryout this subsection, in addition to any funds authorized to be appropriated orappropriated for health centers under any other subsection of this section, such sums asmay be necessary for each of fiscal years 2002 through 2006.

(k) Applications.

(1) Submission. No grant may be made under this section unless an applicationtherefore is submitted to, and approved by, the Secretary. Such an application shall besubmitted in such form and manner and shall contain such information as the Secretaryshall prescribe.

(2) Description of need. An application for a grant under subparagraph (A) or (B) ofsubsection (e)(1) for a health center shall include--

(A) a description of the need for health services in the catchment area of thecenter;

(B) a demonstration by the applicant that the area or the population group to beserved by the applicant has a shortage of personal health services; and

(C) a demonstration that the center will be located so that it will provide servicesto the greatest number of individuals residing in the catchment area or includedin such population group.

Such a demonstration shall be made on the basis of the criteria prescribed by theSecretary under subsection (b)(3) or on any other criteria which the Secretary mayprescribe to determine if the area or population group to be served by the applicant has ashortage of personal health services. In considering an application for a grant undersubparagraph (A) or (B) of subsection (e)(1), the Secretary may require as a condition tothe approval of such application an assurance that the applicant will provide any healthservice defined under paragraphs (1) and (2) of subsection (b) that the Secretary finds isneeded to meet specific health needs of the area to be served by the applicant. Such afinding shall be made in writing and a copy shall be provided to the applicant.

(3) Requirements. Except as provided in subsection (e)(1)(B), the Secretary may notapprove an application for a grant under subparagraph (A) or (B) of subsection (e)(1)unless the Secretary determines that the entity for which the application is submitted is ahealth center (within the meaning of subsection (a)) and that--

(A) the required primary health services of the center will be available andaccessible in the catchment area of the center promptly, as appropriate, and in amanner which assures continuity;

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(B) the center has made and will continue to make every reasonable effort toestablish and maintain collaborative relationships with other health careproviders in the catchment area of the center;

(C) the center will have an ongoing quality improvement system that includesclinical services and management, and that maintains the confidentiality ofpatient records;

(D) the center will demonstrate its financial responsibility by the use of suchaccounting procedures and other requirements as may be prescribed by theSecretary;

(E) the center-- (i) (I) has or will have a contractual or other arrangement with the

agency of the State, in which it provides services, whichadministers or supervises the administration of a State planapproved under title XIX of the Social Security Act [42 USCS §§1396 et seq.] for the payment of all or a part of the center's costsin providing health services to persons who are eligible formedical assistance under such a State plan; and

(II) has or will have a contractual or other arrangement with theState agency administering the program under title XXI of suchAct (42 U.S.C. 1397aa et seq.) with respect to individuals who areState children's health insurance program beneficiaries; or

o (ii) has made or will make every reasonable effort to enter intoarrangements described in subclauses (I) and (II) of clause (i);

(F) the center has made or will make and will continue to make every reasonableeffort to collect appropriate reimbursement for its costs in providing healthservices to persons who are entitled to insurance benefits under title XVIII of theSocial Security Act [42 USCS §§ 1395 et seq.], to medical assistance under aState plan approved under title XIX of such Act [42 USCS §§ 1396 et seq.], or toassistance for medical expenses under any other public assistance program orprivate health insurance program;

(G) the center--o (i) has prepared a schedule of fees or payments for the provision of its

services consistent with locally prevailing rates or charges and designedto cover its reasonable costs of operation and has prepared acorresponding schedule of discounts to be applied to the payment of suchfees or payments, which discounts are adjusted on the basis of thepatient's ability to pay;

o (ii) has made and will continue to make every reasonable effort-- (I) to secure from patients payment for services in accordance

with such schedules; and (II) to collect reimbursement for health services to persons

described in subparagraph (F) on the basis of the full amount offees and payments for such services without application of anydiscount;

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o (iii) (I) will assure that no patient will be denied health care services

due to an individual's inability to pay for such services; and (II) will assure that any fees or payments required by the center

for such services will be reduced or waived to enable the center tofulfill the assurance described in subclause (I); and

o (iv) has submitted to the Secretary such reports as the Secretary mayrequire to determine compliance with this subparagraph;

(H) the center has established a governing board which except in the case of anentity operated by an Indian tribe or tribal or Indian organization under theIndian Self-Determination Act or an urban Indian organization under the IndianHealth Care Improvement Act (25 U.S.C. 1651 et seq.)--

o (i) is composed of individuals, a majority of whom are being served bythe center and who, as a group, represent the individuals being served bythe center;

o (ii) meets at least once a month, selects the services to be provided by thecenter, schedules the hours during which such services will be provided,approves the center's annual budget, approves the selection of a directorfor the center, and, except in the case of a governing board of a publiccenter (as defined in the second sentence of this paragraph), establishesgeneral policies for the center; and

o (iii) in the case of an application for a second or subsequent grant for apublic center, has approved the application or if the governing body hasnot approved the application, the failure of the governing body to approvethe application was unreasonable; except that, upon a showing of goodcause the Secretary shall waive, for the length of the project period, all orpart of the requirements of this subparagraph in the case of a healthcenter that receives a grant pursuant to subsection (g), (h), (i), or (q);

(I) the center has developed--o (i) an overall plan and budget that meets the requirements of the

Secretary; and(ii) an effective procedure for compiling and reporting to the Secretarysuch statistics and other information as the Secretary may require relatingto--

(I) the costs of its operations; (II) the patterns of use of its services; (III) the availability, accessibility, and acceptability of its

services; and (IV) such other matters relating to operations of the applicant as

the Secretary may require; (J) the center will review periodically its catchment area to--

o (i) ensure that the size of such area is such that the services to beprovided through the center (including any satellite) are available andaccessible to the residents of the area promptly and as appropriate;

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o (ii) ensure that the boundaries of such area conform, to the extentpracticable, to relevant boundaries of political subdivisions, schooldistricts, and Federal and State health and social service programs; and

o (iii) ensure that the boundaries of such area eliminate, to the extentpossible, barriers to access to the services of the center, including barriersresulting from the area's physical characteristics, its residential patterns,its economic and social grouping, and available transportation;

(K) in the case of a center which serves a population including a substantialproportion of individuals of limited English-speaking ability, the center has--

o (i) developed a plan and made arrangements responsive to the needs ofsuch population for providing services to the extent practicable in thelanguage and cultural context most appropriate to such individuals; and

o (ii) identified an individual on its staff who is fluent in both that languageand in English and whose responsibilities shall include providingguidance to such individuals and to appropriate staff members withrespect to cultural sensitivities and bridging linguistic and culturaldifferences;

(L) the center, has developed an ongoing referral relationship with one or morehospitals; and

(M) the center encourages persons receiving or seeking health services from thecenter to participate in any public or private (including employer-offered) healthprograms or plans for which the persons are eligible, so long as the center, incomplying with this subparagraph, does not violate the requirements ofsubparagraph (G)(iii)(I).For purposes of subparagraph (H), the term "public center" means a health centerfunded (or to be funded) through a grant under this section to a public agency.

(4) Approval of new or expanded service applications. The Secretary shall approveapplications for grants under subparagraph (A) or (B) of subsection (e)(1) for healthcenters which--

(A) have not received a previous grant under such subsection; or (B) have applied for such a grant to expand their services;

in such a manner that the ratio of the medically underserved populations in ruralareas which may be expected to use the services provided by such centers to themedically underserved populations in urban areas which may be expected to usethe services provided by such centers is not less than two to three or greater thanthree to two.

(l) Technical assistance.

The Secretary shall establish a program through which the Secretary shall providetechnical and other assistance to eligible entities to assist such entities to meet the

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requirements of subsection (l)(3). Services provided through the program may includenecessary technical and nonfinancial assistance, including fiscal and programmanagement assistance, training in fiscal and program management, operational andadministrative support, and the provision of information to the entities of the variety ofresources available under this title and how those resources can be best used to meet thehealth needs of the communities served by the entities.

(m) Memorandum of agreement.

In carrying out this section, the Secretary may enter into a memorandum of agreementwith a State. Such memorandum may include, where appropriate, provisions permittingsuch State to--

(1) analyze the need for primary health services for medically underservedpopulations within such State;

(2) assist in the planning and development of new health centers; (3) review and comment upon annual program plans and budgets of health

centers, including comments upon allocations of health care resources in theState;

(4) assist health centers in the development of clinical practices and fiscal andadministrative systems through a technical assistance plan which is responsive tothe requests of health centers; and

(5) share information and data relevant to the operation of new and existinghealth centers.

(n) Records.

(1) In general. Each entity which receives a grant under subsection (e) shall establishand maintain such records as the Secretary shall require.

(2) Availability. Each entity which is required to establish and maintain records underthis subsection shall make such books, documents, papers, and records available to theSecretary or the Comptroller General of the United States, or any of their dulyauthorized representatives, for examination, copying or mechanical reproduction on oroff the premises of such entity upon a reasonable request therefore. The Secretary andthe Comptroller General of the United States, or any of their duly authorizedrepresentatives, shall have the authority to conduct such examination, copying, andreproduction.

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(o) Delegation of authority.

The Secretary may delegate the authority to administer the programs authorized by thissection to any office, except that the authority to enter into, modify, or issue approvalswith respect to grants or contracts may be delegated only within the central office of theHealth Resources and Services Administration.

(p) Special consideration.

In making grants under this section, the Secretary shall give special consideration to theunique needs of sparsely populated rural areas, including giving priority in the awardingof grants for new health centers under subsections (c) and (e), and the granting ofwaivers as appropriate and permitted under subsections (b)(1)(B)(i) and (l)(3)(G).

(q) Audits.

(1) In general. Each entity which receives a grant under this section shall provide for anindependent annual financial audit of any books, accounts, financial records, files, andother papers and property which relate to the disposition or use of the funds receivedunder such grant and such other funds received by or allocated to the project for whichsuch grant was made. For purposes of assuring accurate, current, and completedisclosure of the disposition or use of the funds received, each such audit shall beconducted in accordance with generally accepted accounting principles. Each audit shallevaluate--

(A) the entity's implementation of the guidelines established by the Secretaryrespecting cost accounting,

(B) the processes used by the entity to meet the financial and program reportingrequirements of the Secretary, and

(C) the billing and collection procedures of the entity and the relation of theprocedures to its fee schedule and schedule of discounts and to the availability ofhealth insurance and public programs to pay for the health services it provides.A report of each such audit shall be filed with the Secretary at such time and insuch manner as the Secretary may require.

(2) Records. Each entity which receives a grant under this section shall establish andmaintain such records as the Secretary shall by regulation require to facilitate the auditrequired by paragraph (1). The Secretary may specify by regulation the form and manner

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in which such records shall be established and maintained.

(3) Availability of records. Each entity which is required to establish and maintainrecords or to provide for and audit under this subsection shall make such books,documents, papers, and records available to the Secretary or the Comptroller General ofthe United States, or any of their duly authorized representatives, for examination,copying or mechanical reproduction on or off the premises of such entity upon areasonable request therefore. The Secretary and the Comptroller General of the UnitedStates, or any of their duly authorized representatives, shall have the authority toconduct such examination, copying, and reproduction.

(4) Waiver. The Secretary may, under appropriate circumstances, waive the applicationof all or part of the requirements of this subsection with respect to an entity.

(r) Authorization of appropriations.

(1) In general. For the purpose of carrying out this section, in addition to the amountsauthorized to be appropriated under subsection (d), there are authorized to beappropriated $ 1,340,000,000 for fiscal year 2002 and such sums as may be necessaryfor each of the fiscal years 2003 through 2006.

(2) Special provisions.

(A) Public centers. The Secretary may not expend in any fiscal year, for grantsunder this section to public centers (as defined in the second sentence ofsubsection (l)(3)) the governing boards of which (as described in subsection(l)(3)(H)) do not establish general policies for such centers, an amount whichexceeds 5 percent of the amounts appropriated under this section for that fiscalyear. For purposes of applying the preceding sentence, the term "public centers"shall not include health centers that receive grants pursuant to subsection (h) or(i).

(B) Distribution of grants. For fiscal year 2002 and each of the following fiscalyears, the Secretary, in awarding grants under this section, shall ensure that theproportion of the amount made available under each of subsections (g), (h), and(i), relative to the total amount appropriated to carry out this section for thatfiscal year, is equal to the proportion of the amount made available under thatsubsection for fiscal year 2001, relative to the total amount appropriated to carryout this section for fiscal year 2001.

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(3) Funding report. The Secretary shall annually prepare and submit to the appropriatecommittees of Congress a report concerning the distribution of funds under this sectionthat are provided to meet the health care needs of medically underserved populations,including the homeless, residents of public housing, and migratory and seasonalagricultural workers, and the appropriateness of the delivery systems involved inresponding to the needs of the particular populations. Such report shall include anassessment of the relative health care access needs of the targeted populations and therationale for any substantial changes in the distribution of funds.

HISTORY:(July 1, 1944, ch 373, Title III, Part D, Subpart I, § 330, as added Oct. 11, 1996, P.L.104-299, § 2, 110 Stat. 3626; Oct. 26, 2002, P.L. 107-251, Title I, § 101, 116 Stat.1622.)

HISTORY; ANCILLARY LAWS AND DIRECTIVES

References in text:The "Indian Self-Determination Act", referred to in this section, is Act Jan. 4, 1975, P.L.93-638, Title I, 88 Stat. 2206, which appears generally as 25 USCS §§ 450 et seq. Forfull classification of such Act, consult USCS Tables volumes.

Explanatory notes:The bracketed reference "(l)(3)" has been inserted in subsec. (e)(1)(B), to indicate thereference probably intended by Congress.The bracketed paragraph designations "(4)" and (5)" have been inserted in subsec. (e) inorder to maintain numerical continuity.A prior § 254b (Act July 1, 1944, ch 373, Title III Part D[B][A], Subpart I, § 329 [319][310], as added Sept. 25, 1962, P.L. 87-692, 76 Stat. 592; Aug. 5, 1965, P.L. 89-109, §3, 79 Stat. 436; Oct. 15, 1968, P.L. 90-574, Title II, § 201, 82 Stat. 1006; March 12,1970, P.L. 91-209, 84 Stat. 52; June 18, 1973, P.L. 93-45, Title I, § 105, 87 Stat. 91;July 23, 1974, P.L. 93-353, Title I, § 102(d), 88 Stat. 362; July 29, 1975, P.L. 94-63,Titles IV, VII, §§ 401(a), 701(c), 89 Stat. 334, 352; April 22, 1976, P.L. 94-278, TitleVIII, § 801(a), 90 Stat. 414; Aug. 1, 1977, P.L. 95-83, Title III, § 303, 91 Stat. 388; Nov.10, 1978, P.L. 95-626, Title I, Part A, §§ 102(a), 103(a)-(f), (g)(1)(A), (B), (g)(2), (h),(i), 92 Stat. 3551; July 10, 1979, P.L. 96-32, § 6(a), 93 Stat 83; Aug. 13, 1981, P.L. 97-

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35, Title IX, Subtitle D, § 930, 95 Stat. 930; Dec. 21, 1982, P.L. 97-375, Title I, §107(b), 96 Stat. 1820; April 24, 1986, P.L. 99-280, §§ 6, 7, 100 Stat. 400, 401; Aug. 10,1988, P.L. 100-386, § 2, 102 Stat. 919; Nov. 6, 1990, P.L. 101-527, § 9(b), 104 Stat.2332; Oct. 27, 1992, P.L. 102-531, Title III, § 309(a), 106 Stat. 3499) was omitted in thegeneral amendment of this Subpart by Act Oct. 11, 1996, P.L. 104-299, § 2, 110 Stat.3626. Such section provided for migrant health centers.A prior § 329 of Act July 1, 1944, ch 373, which provided for a National Health ServiceCorps, was repealed by Act Oct. 12, 1976, P.L. 94-484, Title IV, § 407(b)(1), 90 Stat.2268. Similar provisions appear as 42 USCS § 254d.Effective date of section:This section became effective on October 1, 1996, pursuant to § 5 of Act Oct. 11, 1996,P.L. 104-299, which appears as 42 USCS § 233 note.

Amendments:2002. Act Oct. 26, 2002, in subsec. (b), in para. (1)(A), in cl. (i)(III)(bb), substituted"appropriate cancer screening" for "screening for breast and cervical cancer", in cl. (ii),inserted "(including specialty referral when medically indicated)", and, in cl. (iii),inserted "housing,", and, in para. (2), redesignated subparas. (A) and (B) as subparas.(C) and (D), respectively, inserted new subparas. (A) and (B), and, in subpara. (C)(i) asredesignated, substituted "associated with--" and subcls. (I)-(IV) for "associated withwater supply;"; in subsec. (c)(1), in subpara. (B), in the heading, substituted "Managedcare" for "Comprehensive service delivery", in the introductory matter, substituted"managed care network or plan." for "network or plan for the provision of healthservices, which may include the provision of health services on a prepaid basis orthrough another managed care arrangement, to some or to all of the individuals whichthe centers serve.", and deleted the concluding matter, which read: "Any such grant mayinclude the acquisition and lease of buildings and equipment which may include dataand information systems (including the costs of amortizing the principal of, and payingthe interest on, loans), and providing training and technical assistance related to theprovision of health services on a prepaid basis or under another managed carearrangement, and for other purposes that promote the development of managed carenetworks and plans.", and added subparas. (C) and (D); in subsec. (d), substituted thesubsection heading for one which read:

"Managed care loan guarantee program.", in para. (1), in subpara. (A), substituted"up to 90 percent of the principal and interest on loans made by non-Federal lenders tohealth centers, funded under this section, for the costs of developing and operatingmanaged care networks or plans described in subsection (c)(1)(B), or practicemanagement networks described in subsection (c)(1)(C)." for "the principal and intereston loans made by non-Federal lenders to health centers funded under this section for thecosts of developing and operating managed care networks or plans.", in subpara. (B), in

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cl. (i), deleted "or" following the concluding semicolon, in cl. (ii), substituted "; or" for aconcluding period, and added cl. (iii), and added subparas. (D) and (E), deleted paras.(6) and (7), which read:

"(6) Annual report. Not later than April 1, 1998, and each April 1 thereafter, theSecretary shall prepare and submit to the appropriate committees of Congress a reportconcerning loan guarantees provided under this subsection. Such report shall include--"(A) a description of the number, amount, and use of funds received under each loanguarantee provided under this subsection;"(B) a description of any defaults with respect to such loans and an analysis of thereasons for such defaults, if any; and"(C) a description of the steps that may have been taken by the Secretary to assist anentity in avoiding such a default.

"(7) Program evaluation. Not later than June 30, 1999, the Secretary shall prepare andsubmit to the appropriate committees of Congress a report containing an evaluation ofthe program authorized under this subsection. Such evaluation shall include arecommendation with respect to whether or not the loan guarantee program under thissubsection should be continued and, if so, any modifications that should be made to suchprogram.",and redesignated para. (8) as new para. (6); in subsec. (e), in para. (1), in subpara. (B),substituted "subsection (k)(3)" for "subsection (j)(3), and added subpara. (C), in para.(5), in subpara. (A), in the introductory matter, inserted "subparagraphs (A) and (B) of",redesignated subparas. (B) and (C) as subparas. (C) and (D), respectively, and insertednew subpara. (B), and redesignated paras. (4) and (5) as paras. [(4)](3) and [(5)](4),respectively; in subsec. (g), in para. (2), in subpara. (A), inserted "and seasonalagricultural worker", and, in subpara. (B), substituted "and seasonal agriculturalworkers, and members of their families," for "and members of their families", and, inpara. (3)(A), deleted "on a seasonal basis" following "agriculture"; in subsec. (h), inpara. (1), substituted "homeless children and youth and children and youth at risk ofhomelessness" for "homeless children and children at risk of homelessness",redesignated para. (4) as para. (5), inserted new para. (4), and, in para. (5)(C) asredesignated, substituted ", risk reduction, outpatient treatment, residential treatment,and rehabilitation" for "and residential treatment"; in subsec. (j)(3), in subpara. (E), in cl.(i), designated the existing provisions as subcl. (I), substituted "plan; and" for "plan; or",and added subcl. (II), and substituted cl. (ii) for one which read: "(ii) has made or willmake every reasonable effort to enter into such an arrangement;", in subpara. (G), in cl.(ii)(II), deleted "and" following the concluding semicolon, redesignated cl. (iii) as cl.(iv), and inserted new cl. (iii), in subpara. (H), substituted "or (q)" for "or (p)", insubpara. (K)(ii), deleted "and" following the concluding semicolon, in subpara. (L),substituted "; and" for a concluding period, and added subpara. (M); and redesignatedsubsec. (l) as subsec. (s).

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Such Act further purported to redesignate subsecs. (j), (k), and (m)-(q) as subsecs. (n),(o), and (p)-(s), respectively; however, this amendment was executed by redesignatingsubsecs. (j), (k) and (m)-(q) as subsecs. (l), (m), and (n)-(r), respectively, in order toeffectuate the probable intent of Congress.Such Act further inserted new subsec. (j); substituted new subsec. (m) for subsec. (m) asredesignated, for one which read: "(m) Technical and other assistance. The Secretarymay provide (either through the Department of Health and Human Services or by grantor contract) all necessary technical and other nonfinancial assistance (including fiscaland program management assistance and training in such management) to any public orprivate nonprofit entity to assist entities in developing plans for, or operating as, healthcenters, and in meeting the requirements of subsection (j)(2)."; in subsec. (q) asredesignated, substituted "(l)(3)(G)" for "(j)(3)(G)"; and, in subsec. (s) as redesignated,in para. (1), substituted "$ 1,340,000,000 for fiscal year 2002 and such sums as may benecessary for each of the fiscal years 2003 through 2006." for "$ 802,124,000 for fiscalyear 1997, and such sums as may be necessary for each of the fiscal years 1998 through2001.", and, in para. (2), in subpara. (A), substituted "(l)(3)" for "(j)(3)" and substituted"(l)(3)(H)" for "(j)(3)(G)(ii)", and substituted subpara. (B) for one which read:

"(B) Distribution of grants.(i) Fiscal year 1997. For fiscal year 1997, the Secretary, in awarding grants under thissection shall ensure that the amounts made available under each of subsections (g), (h),and (i) in such fiscal year bears the same relationship to the total amount appropriatedfor such fiscal year under paragraph (1) as the amounts appropriated for fiscal year 1996under each of sections 329, 340, and 340A (as such sections existed one day prior to thedate of enactment of this section) bears to the total amount appropriated under sections329, 330, 340, and 340A (as such sections existed one day prior to the date of enactmentof this section) for such fiscal year.

"(ii) Fiscal years 1998 and 1999. For each of the fiscal years 1998 and 1999, theSecretary, in awarding grants under this section shall ensure that the proportion of theamounts made available under each of subsections (g), (h), and (i) is equal to theproportion of amounts made available under each such subsection for the previous fiscalyear, as such amounts relate to the total amounts appropriated for the previous fiscalyear involved, increased or decreased by not more than 10 percent.".

Other provisions:GAO study of hospital staff privileges for physicians practicing in community healthcenters. Act Nov. 5, 1990, P.L. 101-508, Title IV, Subtitle A, Part 2, Subpart B, §4161(a)(7), 104 Stat. 1388-94; Oct. 31, 1994, P.L. 103-432, Title I, Subtitle B, Part III, §147(f)(4)(B), 108 Stat. 4431 (effective as if included in the enactment of Act Nov. 5,1990, as provided by § 147(g) of the 1994 Act, which appears as 42 USCS § 1320a-3anote), provides:

Dobson | DaVanzo


"(A) Study. The Comptroller General shall conduct a study of whether physicianspracticing in community and migrant health centers are able to obtain admittingprivileges at local hospitals. The study shall review--"(i) how many physicians practicing in such centers are without hospital admittingprivileges or have been denied admitting privileges at a local hospital, and"[(ii)](i)(I) the criteria hospitals use in deciding whether to grant admitting privilegesand (II) whether such criteria act as significant barriers to health center physiciansobtaining hospital privileges."(B) Report. By not later than 18 months after the date of the enactment of this Act, theComptroller General shall submit a report on the study under subparagraph (A) to theCommittees on Ways and Means and Energy and Commerce of the House ofRepresentatives and to the Committee on Finance of the Senate and shall include in suchreport such recommendations as the Comptroller General deems appropriate.".

Oct. 11, 1996 amendments; transition provisions. Act Oct. 11, 1996, P.L. 104-299, §3(b), 110 Stat. 3644 (effective Oct. 1, 1996, as provided by § 5 of such Act, whichappears as 42 USCS § 233 note), provides: "The Secretary of Health and HumanServices shall ensure the continued funding of grants made, or contracts or cooperativeagreements entered into, under subpart I of part D of title III of the Public HealthService Act (42 U.S.C. 254b et seq.) (as such subpart existed on the day prior to the dateof enactment of this Act), until the expiration of the grant period or the term of thecontract or cooperative agreement. Such funding shall be continued under the sameterms and conditions as were in effect on the date on which the grant, contract orcooperative agreement was awarded, subject to the availability of appropriations.".

References to community health centers, etc. Act Oct. 11, 1996, P.L. 104-299, § 4(c),110 Stat. 3645 (effective Oct. 1, 1996, as provided by § 5 of such Act, which appears as42 USCS § 233 note), provides: "Whenever any reference is made in any provision oflaw, regulation, rule, record, or document to a community health center, migrant healthcenter, public housing health center, or homeless health center, such reference shall beconsidered a reference to a health center.".Act Oct. 11, 1996; additional amendments. Act Oct. 11, 1996, P.L. 104-299, § 4(e), 110Stat. 3645 (effective Oct. 1, 1996, as provided by § 5 of such Act, which appears as 42USCS § 233 note), provides: "After consultation with the appropriate committees of theCongress, the Secretary of Health and Human Services shall prepare and submit to theCongress a legislative proposal in the form of an implementing bill containing technicaland conforming amendments to reflect the changes made by this Act [for fullclassification, consult USCS Tables volumes].".

Guarantee study. Act Oct. 26, 2002, P.L. 107-251, Title V, § 501, 116 Stat. 1664,provides: "The Secretary of Health and Human Services shall conduct a study regardingthe ability of the Department of Health and Human Services to provide for solvency formanaged care networks involving health centers receiving funding under section 330 of

Dobson | DaVanzo


the Public Health Service Act [this section]. The Secretary shall prepare and submit areport to the appropriate Committees of Congress regarding such ability not later than 2years after the date of enactment of the Health Care Safety Net Amendments of 2002[enacted Oct. 26, 2002].".

NOTES:

CODE OF FEDERAL REGULATIONSPublic Health Service, Department of Health and Human Services-Grants for migranthealth services, 42 CFR Part 56.

CROSS REFERENCESThis section is referred to in 29 USCS § 777b; 42 USCS §§ 218, 254g, 296m, 297b,297j, 300e-14a, 300ee-16, 300ee-33, 1396b, 1396r-1.

RESEARCH GUIDEAm Jur:70C Am Jur 2d, Social Security and Medicare § 2327.

INTERPRETIVE NOTES AND DECISIONS1. Generally2. Governing body3. Challenges to administrative decisions

1. GenerallyCommunity health center provides health services for all residents of area it serves (42USCS § 254c(a)) unlike migrant health centers which serve narrower group (predecessorto 42 USCS § 254b). Martinez v Mathews (1976, CA5 Fla) 544 F2d 1233.

2. Governing bodyPreliminary injunction was properly issued requiring provider of health services formigrant and seasonal farmworkers to comply with Migrant Health Act's requirement thatindividuals being served by medical center comprise majority of provider's "governingboard" as mandated under predecessor to 42 USCS § 254b by requiring that new board

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be selected as soon as plan therefor was approved by court. Martinez v Mathews (1976,CA5 Fla) 544 F2d 1233.

3. Challenges to administrative decisionsMigrant health service provider claiming that HEW's disapproval of benefits grantedunder predecessor to 42 USCS § 254b damaged reputation of provider was withinprotective zone of interest and had standing to challenge HEW's action. Southern Mut.Help Asso. v Califano (1977) 187 US App DC 307, 574 F2d 518.

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Appendix CLiterature Review Evidence Tables

Reference Year Title Type Findings & Conclusions

Cost Effectiveness

McDonald, Julie and Hare, Lesley, UNSWSchool of Public Health & CommunityMedicine, Sept 2004

2004The Contribution ofPrimary & CommunityHealth Services

LiteratureReview

Contributions of strengthened primaryand community Health care services toprovide alternatives to hospitalization,provide care for those withchronic/complex conditions, populationhealth and prevention

Huang, Elbert; Zhang, Qi; Brown, Sydney;Drum, Melinda; Meltzer, David; Chin,Marshall, HSR, 42:6, Part I, Dec 2007

2007

The Cost-Effectiveness ofImproving DiabetesCare in U.S. FederallyQualified CommunityHealth Centers

Data review

During the first 4 years of the HealthDisparities Collaborative, multipleimprovements in diabetes care wereobserved, which over time will be costeffective

Proser, Michelle, National Association ofCommunity Health Centers, Special TopicsIssue Brief #2, July 2003

2003The Role of HealthCenters in ReducingHealth Disparities

Report on thestate of CHCs

CHCs deliver savings to all payers,especially Medicaid. They are able toimprove health outcomes. Withadditional funding, CHCs could continueto eliminate disparities while yieldingcost savings.

Economic Engines

Shin, Peter; Finnegan, Brad; Rosenbaum,Sara; GWU Dept of Health Policy; Feb 25,2008

2008

How Does Investmentin Community HealthCenters Affect theEconomy?

Research Brief

Based on Health Care Center earningand increased third party revenues,centers will be able to serve anadditional 1.8 million patients, andgenerate about $1 billion health centerrevenues

Geiger, Jack, American Journal of PublicHealth, Nov 2002, Vol 92, No 11

2002

Community-OrientedPrimary Care: A Pathto CommunityDevelopment

Article

Based on post-Katrina MS Deltaexperience, promotes partnershipsbetween campus and community healthservices

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Isaacs, Stephen and Jellinek, Paul, HealthAffairs, Vol. 26, No 3, May-June 2007

2007

Is there a (Volunteer)Doctor in the House?Free Clinics &volunteer physicianreferral networks inthe US

Report onresults offunding - roleofvolunteerismfor theunderserved.

Community Health Centers are visiblesafety nets, but private physicians aremain source of care for uninsured andMedicaid. The solution is national healthinsurance.

Doeksen, Gerald; Johnson, Tom;Willoughby, Chuck, SRDC #202, January2997

1997

Measuring theEconomic Importanceof the Health Sectoron a Local Economy:A Brief LiteratureReview andProcedures toMeasure LocalImpacts

LiteratureReview

The health sector accounts for a largepercent of community employment andincome.

www.coastalhealth.net/health_centers.htmlaccessedon10/29/08

Health Care for AllServing West Marin AHistory of CommunityHealth Centers

History/generalinfo on CHCs

CHCs improve quality of life byimproving access to primary/preventivecare; managing chronic illness;reducing health disparities; providingcost effective care

Funding

Lemon, Stephenie; Zapka, Jane;Estabrook, Barbara; Benjamin, Evan; AmJournal of Public Health, April 2006, vol 96,No.4

2006Challenges toResearch in UrbanCHCs

Review

CHCs are an important setting forreducing disparities & providingcomprehensive health care forunderserved, racial ethnic minorities,Medicaid, low-income un- orunderinsured.

Hurley, Robert; Felland, Laurie; Lauer,Johanna, HSC, No 116, December 2007

2007

Community HealthCenters Tackle RisingDemands andExpectations

Data review

CHCs are responding to rising demandsby expanding capacity and addingservices, but they are faced withstaffing and resource constraints.

Taylor Jessamy, GWU National Health 2004 The Fundamentals of Background The reliance on health care safety net

http://www.coastalhealth.net/health_centers.html

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Forum, August 31, 2004 Community HealthCenters

Paper demands a continuing policy on healthcenter grant program.

Hadley, Jack; Cunningham, Peter;Hargraves, Lee, Health Affairs, 25, no. 6,2006

2006

Would Safety-NetExpansions OffsetReduced AccessResulting From LostInsurance Coverage?Race/EthnicityDifferences

Expanded CHC funding resulted in smallincreases to access, more for minoritiesthan whites.

Quality of Care

Reschovsky, James and O'Malley, Ann,Health Affairs, 26, No. 3, 2007

2007

Do Primary CarePhysicians TreatingMinority PatientsReport ProblemsDelivering High-Quality Care?

Data ReviewPhysicians in high minority practiceshave lower incomes, creating quality-related difficulties delivering care.

Felt-Lisk, Suzanne; McHugh, Megan;Howell, Embry - Health Affairs, Vol 21, No5, Sept-Oct 2002

2002

Monitoring LocalSafety-Net Providers:Do they HaveAdequate Capacity?

Data Review

In the 5 cities studied, safety netcapacity is strained for pharmaceuticalservices, specialty services, dental careand behavioral health care (in 3 cities).

Raising the Bar for Health Care 2005Raising the Bar forHealth Care

Policy BriefGovernor Gregoire's five-point strategyfor improving health care inWashington State

Hoffman, Catherine and Sered, SusanStarr. November 2005.

2005Threadbare: Holes inAmerica's Health CareSafety Net

Study ofuninsured in 5states

Without sustained financing, the safetynet cannot continue its mission to servethe poor and uninsured. Health centersare at the core of the safety net,serving over 11 million - but there arelarge holes in the net - 18,000Americans die due to lack of healthcoverage; the demand for health

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centers far outweighs the funding.

J Ambulatory Care Manage, Vol 28, No 4,pp 340-347, 2005

2005

Community HealthCenters' Impact onthe Political EconomicEnvironment, TheMassachusettsExample

Article

Massachusetts is a laboratory toexamine success in the health centermovement. Policy, investments,insurance & other coalitions led toachievements.

Hicks, LeRoi; O'Malley, James; Lieu,Tracey; Keegan, Thomas; Cook, Nakela;McNeil, Barbara; Landon, Bruce,Guadagnoll, Edward, Health Affairs,Vol25,No 6, Nov - Dec 2006

2006

The Quality of ChronicDisease Care in U.S.Community HealthCenters

Data Review

Examines quality of care for patientswith chronic disease and found lessthan half received appropriate care;and uninsured receive poorer qualitycare than insured

Access Denied: A Look at America'sMedically Disenfranchised

2007

Access Denied: ALook at America'sMedicallyDisenfranchised

Study

56 million Americans are medicallydisenfranchised and one in fiveAmericans are at great risk of nothaving a medical home to address theirbasic health needs. Proposes growingthe number and reach of CHCs

VulnerablePopulations

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Cook, Nakela; Hicks, LeRoi; O'Malley,James; Keegan, Thomas; Guadagnoli,Edward; Landon, Bruce, Health Affairs, 26,No. 5, 2007

2007

Access to SpecialtyCare and MedicalServices inCommunity HealthCenters

Data review

Uninsured patients have greaterdifficulty obtaining access to off-sitespecialty services, including referralsand diagnostic testing, than the insured

Lewin, Marion and Baxter, Raymond,Health Affairs, Vol 26, No 5, Sept-Oct 2007

2007America's Health CareSafety Net: Revisitingthe 2001 IOM Report

Data Review

Reports of threats to safety-netfinancial viability; safety net providersvary widely by state in quality of care &racial/ethnic disparity - with no federalentity dedicated to monitoring andassessing the safety net performance

Shi, Leiyu; Stevens, Gregory; Wulu, John;Politzer, Robert, Xu, Jiahong, HSR: 39-6,Part I, Dec 2004

2004

America's HealthCenters: ReducingRacial and EthinicDisparities in PerinatalCare and BirthOutcomes

Data review

Racial/ethnic disparities may be lowerin CHCs compared to the generalpopulation despite serving higher-riskgroups

CHC Perspective 2007 CHC Perspective Article

Describes the need for increasedattention to the integration of physicaland mental health services to medicallyunderserved populations

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Waitzkin, Howard, Health Serv Res. 2005June; 40(3): 941-952

2005

Commentary - TheHistory andContradictions of theHealth Care SafetyNet

Data ReviewConclusion: Without a unified healthsystem, the health care safety net willremain isolated & vulnerable

Betancourt, Joseph; Green, Alexander;Carrillo, Emilio; Park, Elyse; Health Affairs,Vol 24, No 2, March/April 2005

2005

Cultural Competenceand Health CareDisparities: KeyPerspectives andTrends

Data ReviewIndicates a clear link between culturalcompetence and quality of care andeliminating racial/ethnic disparities

Gresenz, Carole; Rogowski, Jeannette;Escarce, Jose, Pediatrics, Journal ofAmerican Academy of Pediatrics, 2005-0733

2005

Dimensions of theLocal Health CareEnvironmnet and Useof Care by Uninsuredchildren in Rural andUrban Areas

Article

Fewer than half of uninsured childrenhave office-based health visits. In ruralchildren, proximity to a safety netprovider equates to higher use andmedical expenditures.

Samuels, ME; Xirasagar, S; Elder, KT;Probst, JC - Rural Health, 2008 Winter;24(1):24-31

2008

Enhancing the CareContinuum in RuralAreas: Survey of CHC- rural hospitalcollaborations

AbstractCollaborations between CHCs andCritical Access Hospitals are anuntapped resource

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Hoffman, Catherine and Schwartz, Karyn,Health Affairs, Web Exclusive July 2008

2008

Eroding AccessAmong Nonelderly USAdults with ChronicConditions: 10 Yearsof Change

Report

Access to care among uninsured withchronic conditions deteriorated between1997 - 2006; also, those with healthinsurance were also going withoutneeded care due to cost. Reports ondeterioration of care among theuninsured with chronic conditions; butalso, the deterioration of those insured,due to cost

Gusmano, Michael; Fairbrother,Gerry;Park, Heidi, Health Affairs, Vol 21, No 6,2002

2002

Exploring the Limits ofthe Safety Net:Community HealthCenters and Care forthe Uninsured

Article

Increasing number of CHCs is not anadequate substitute for expandinghealth insurance coverage; CHCs arelimited in their ability to providediagnostic, specialty and behavioralservices

Derose, Kathryn; Escarce, Jose; Lurie,Nicole, Health Affairs, 26, No. 5, 2007

2007Immigrants andHealth Care: Sourcesof Vulnerability

Data review

Overall, immigrants have lower rates ofhealth insurance, use less health care,and receive lower quality of care thanUS-born populations

Fiscella, Kevin and Holt, Kathleen, JABFM,No - Dec 2007, Vol 20 No 6

2007

Impact of PrimaryCare Patient Visits onRacial & EthnicDisparities inPreventive Care in theUS

Journal article-results ofclaims analysis

Frequency of primary care visitscontribute minimally to racial andethnic disparities in preventive services.Poverty is a greater contribution toracial & ethnic disparity in preventiveservices than is frequency of visits.

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Keppel, Kenneth; Bilheimer, Linda; Gurley,Leda, Health Affairs, Vol 26, No 5, Sept-Oct 2007

2007

Improving PopulationHealth & ReducingHealth CareDisparities

Data Review

Review of midcourse findings of HealthyPeople 2010. Two goals (1) to increaselife expectancy & improve quality of lifeand (2) to eliminate health disparities -race, ethnicity…. May be at odds.Reducing burden to overall populationmay not reduce burden of subgroups -Without accelerating improvements forracial populations with unfavorablerates, health disparities will persist

Baron, Richard, Health Affairs, Vol 27, No5, Sept-Oct 2008

2008

Medicine Cut Off Fromits Roots: ContextMatters in MedicalEducation

Article

Author's opinion that failure to offersustainable model for patient-centeredpractice deprives communities anddiverts some of the best professionalsaway from social problems that needthem most. Stresses the "loss" to theprofession as physicians aredisconnected with their communities

Smedley, Brian, Health Affairs, Vol 27, No2, March/April 2008

2008

Moving BeyondAccess: AchievingEquity in State HealthCare Reform

LiteratureReview

State health care reforms areincreasing and may reduce health careinequalities. Policymakers must addressstructural and community-levelproblems

Wilson-Stronks; Lee, KK; Condero, CI;Kopp, Al; Galvez, E, Oakbrook Terrace, IL,The Joint Commission; 2008

2008

One Size Does Not FitAll: Meeting theHealth Care Needs ofDiverse Populations

JointCommissionReport

Report on findings that with increaseddiversity in our population, there areincreased language and culturalbarriers - and these barriers place anoverwhelming burden on hospitals.Authors hope report is guide for healthcare organizations to improve practicesto address needs of diverse patients.

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Commonwealth Fund pub. 1073, Vol. 28,November 2007.

2007

Overburdened &Overwhelmed:Struggles ofCommunities withHigh Medical CostBurdens

Study of highuninsuredrates in the 60sites of the2003 CTSsurvey

A high uninsured rate combined with ahigh prevalence of medical costburdens can pose a threat to the healthof an entire community.

Dept of Health Policy and Management,John Hopkins Bloomberg School of PublicHealth, July 2004

2004

Primary CareExperience & RacialDisparities in Self-reported HealthStatus

Can better primary care attenuateracial/ethnic disparities in self-reportedhealth status? Found higher qualityprimary care associated with reducedracial/ethnic disparities

Grant to AAMCHC from Canadian Instituteof Health Research

2005Racialised Groups &Health Status

LiteratureReview

Poverty in Toronto is increasinglydefined along ethno-racial lines. Theimpact of income, housing,discrimination and access to health careas determinants of health in Canada.

Ricketts, Thomas and Randolph, Randy,Health Affairs, Vol 27, No 5, Sept-Oct 2008

2008The Diffusion ofPhysicians

Report onfindingsindicatingphysiciansmigrate awayfrom rural andunderservedurbanpopulations.

The "standard" theory of diffusion ofprofessionals from high-to low-densitymarkets is confirmed, but counties withgreatest need for additional physiciansdo not easily retain them

Youdelman, Mara, Health Affairs, 27, No.2, 2008

2008The Medical Tongue:U.S. Laws and Policieson Language Access

LiteratureReview(legislation)

Language barriers lead to lower qualityof care. Improving language access isessential to ensure language doesn'taffect health or mortality

Dobson | DaVanzo



Druss, Benjamin; Bornemann, Thomas;Fry-Johnson, Yvonne; McCombs, Harriet;Politzer, Robert; Rust,George, AJPH,September 2008, Vol 98

2008

Trends in MentalHealth & SubstanceAbuse Services at theNation's CHCs

Journal article

CHCs play central role in mentalhealth/substance abuse treatment.Number of mental health patients hasincreased substantially from 1998 -2003. CHCs are playing an increasingrole in providing treatment

Mechanic, David and Tanner Jennifer,Health Affairs, 26, No. 5, 2007

2007

Vulnerable People,Groups andPopulations: SocietalView

Article

Lack of access to health care in ourvulnerable population, leads to societalills, such as alienation, substanceabuse, inappropriate behavior andvictimization of others.

Grumbach, Kevin; Hart, Gary; Mertz,Elizabeth; Coffman, Janet; Palazzo, Lorella- Annals of Family Medicine 1:97-104(2003)

2003

Who is Caring for theUnderserved? AComparison ofPrimary CarePhysicians andNonphysicianClinicians in CA & WA

Study

Nonphysician primary care clinicians &family physicians more like to care forunderserved than primary carephysicians in other specialties. Stressesneed for ongoing commitment bypolicymakers, educational institutions,etc. to promote

Dobson | DaVanzo


Appendix DData Collection Instrument

The survey instrument was developed as a Microsoft Excel workbook. Surveys were distributedto CHCs by CHP/CHNWA and WACMHC. Survey instructions requested that respondentsreturn completed workbooks directly to Dobson | DaVanzo.

The survey instructions sent to respondents are as follows:

Economic Impact ofCommunity Health Plan and Community Health Centers

In Washington State

BackgroundDobson DaVanzo & Associates, LLC (“Dobson | DaVanzo”) is engaged by the CommunityHealth Plan (“CHP”) to study the impact of its efforts and those of Community Health Centers(“CHC”) in Washington State. One element of our study is an assessment of the total economicimpact of CHP and CHCs. For this assessment, our methodology is based on an Input-Outputmodel. Specifically, we are using IMPLAN software and data to model the CHP and CHCimpacts. (See www.implan.com for more information.)

We will use two IMPLAN approaches to determine the total economic impact of the combinedefforts of CHP and CHCs:

1. Total Expenditures. Please provide total expenditure information (e.g., cash-basedaccounting), including employee compensation, rather than expense information (e.g.,accrual-based accounting) to the extent that total expenditure information is possible. Thatis, we would much prefer for you to send us accrued-based information than for you todecide not to participate.

2. Employees. Please provide FTE (full-time equivalent) and compensation (salaries,benefits, and taxes) information.

In order to model the economic impact of CHP alone, we ask you to provide us with thegeographic distribution of patients by the insurance coverage (CHP, Non-CHP, and Uninsuredcategories).

Questions:If you have any questions, please contact Patrick McMahon at 703.307.2292 (cell) or [email protected].

Deadline:The deadline for data delivery is Thursday, October 2. While we realize this is a shortturnaround time, it is necessary to complete the study in a timely fashion. If you have anyconcerns about meeting this deadline, please contact Patrick McMahon in advance at703.307.2292 (cell) or at [email protected]

mailto:[email protected]


Dobson | DaVanzo


Data Delivery:Once you have completed all pages of the excel spreadsheet, please email the data directly toPatrick McMahon at [email protected]. Dobson | DaVanzo will treat yourresponses as confidential and will not share your responses with CHP, other CHCs, or other thirdparties. Aggregate data and the output of our analyses will be used in publication. Pleasecontact us should you have any questions.

Instructions to CHP Data Collection InstrumentBasic Info Worksheet1. Please identify a point of contact and provide us sufficient information to reach him or hershould any questions arise.

2. Please identify your organization and the financial period used in your response. Ideally, thefinancial period will be calendar year 2006, 01/01/2006 through 12/31/2006. We realize thisrequest may present a significant burden, given time and system limitations, and that responsesmay reflect a different period. Identification of the time period used for each response will helpus better analyze the aggregate data.

3. We recognize that our request for historical data in a compressed time frame may interruptyour other priorities and that placing a call or writing an email may further interrupt youractivities. Should you find it helpful, please provide us with comments or ask questions withinthe instrument, specifically in the Comment / Question fields on the Basic Info worksheet.

1. Patients WorksheetData provided in this worksheet will help us to understand where your CHC provides services.This information is then used as a base to allocate your CHC’s expenditures.

1. In this worksheet, we are seeking the number of patients served for 2006. We include thedates 01/01/2006 012/31/2006 to reinforce our ideal for calendar year data. Should the financialdata you provide cover different dates, please provide patient information for the dates coveredby your financial information.

2. We will need to receive these data at a county level.

If all of your CHC clinics are located in one county, you will only need to enter onerow of data. In cell A3 (County 1- Clinic Name(s)***), please list the county in whichall of your clinics are located. For example, enter “Springfield – ALL CLINICS” toindicate that all of your clinics are located in Springfield County.

If your CHC clinics are located in multiple counties, you will need to enter multiplerows of data so that we can determine the patients from each county. Beginning in cellA3 (County 1- Clinic Name(s)***), please list the county and name of each of yourclinic(s). For example, enter “Springfield – Memorial Clinic” for a clinic named“Memorial Clinic” that is located in Springfield County. If it is easier for you, you may choose to summarize information for clinics that are

located in the same county. For example, enter “Springfield – Memorial Clinic and


Dobson | DaVanzo


Springfield County Clinic” for two clinics, “Memorial Clinic” and “SpringfieldCounty Clinic,” both of which are located in Springfield County.

Should it be easier to report each clinic separately, then –by all means– list each clinicon separate line. For example, enter “Springfield – Memorial Clinic” on one line and“Springfield – Springfield County Clinic” on a second line.

3. For each “County – Clinic(s)” that you list in column A, please provide with the counts ofnon-duplicated patients for whom service was provided (not the count of capitated patients) byeach of three payer categories. These three categories are as follows:

CHP-Insured Patients - Patients who are enrollees of CHP (all CHP enrollees who havereceived services at your clinic in the designated time period, including CHP HealthyOptions members (HO), CHP Basic Health members (BHP), CHP Community HealthFirst members (Medicare), and CHP GA-U pilot enrollees in King and Pierce Counties);

Non-CHP-Insured Patients - all other patients who are covered by a third-party that isnot CHP including Medicare, Medicaid, and commercial insurance; and

Non-Insured Patients - all patients without third-party coverage who pay on the slidingfee scale (according to UDS rules for counting the uninsured - Table 4).

Information provided in each of these three categories should equal the total number of patientsserved by your CHC.

4. Ten counties are visible in the initial survey instrument. Additional rows are available in theworksheet, but are hidden to make the worksheet easier to use. Should you need to accessadditional rows, please “un-hide” these rows. Please contact us should you need assistance.2, Expenditures WorksheetData provided in this worksheet will help us to understand your CHC’s total expenditures for2006 (including employee compensation). This information will be used to model CHP’s andyour CHC’s economic impact on Washington State and on specific counties in WashingtonState.

1. In this worksheet, we are seeking to classify your CHC’s total expenditures for 2006. Weinclude the dates 01/01/2006 012/31/2006 to reinforce our ideal for calendar year data. Shouldthe financial data you provide cover different dates, please remember to enter the financialperiod for your data on the Basic Info Worksheet.

2. We are seeking to classify all of your expenditures into a limited number of categories. This isbecause the IMPLAN software models a limited number of categories. These categories that weare using in our analysis are as follows:

Health care services – Please use this category for all health care services, includingphysicians, dentists, nurse practitioners, nurses, behavioral / mental health specialists,chiropractors, speech pathologists, naturopaths, and acupuncturists. Please also usecategory for support of medical services, such as clinicians, laboratory services, X-raysand other imaging services, and services.

Default category - Because the primary product of CHCs is health care services,please use this category as your “default category.” That is, if the expenditure isdirectly related to health care services, include it in this category.

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Nursing and residential care – Please use this category for expenditures associated withall residential facilities, such as nursing homes, group homes, and halfway houses. Ifpossible, please include the expenditures for medical services provided within residentialfacilities. We understand that most CHCs will not have expenditures within thiscategory.

Social assistance – Please use this category for expenditures associated with non-medicalsocial support services, such as outreach and eligibility determination, food banks, jobcounseling, adult/disabled day care, rape crisis centers, WIC, Maternity Support Services(MSS), First Steps, and self-help assistance.

Pharmacy – To the extent that you’re able to isolate these expenditures from medicalservices, please provide your CHC’s expenditures for pharmaceutical products.

Sponsorship – We understand that some CHCs may contribute to the premiums of BasicHealth members. To the extent that your CHC engages in sponsorship and can isolatethese expenditures from medical services, please provide your CHC’s expenditures forsponsorship.

Other - Contact Dobson | DaVanzo before using this category – We believe that mostCHC’s will be able to classify all expenditures into the categories outlined above –especially with the default to “Medical services”– we recognize that your CHC may havea material expenditure that may not fall into this category. Should you have anyquestions about where to include a segment of your operations, please contact Dobson |DaVanzo for guidance.

3. As with Worksheet 1. Patients, ten counties are visible in the initial survey instrument. Pleasefollow the same instructions for county level data that is described under Step 2 of the Patientworksheet.

Additional rows are available in the worksheet, but are hidden to make the worksheet easier touse. Should you need to access additional rows, please “un-hide” these rows. Please contact usshould you need assistance.

Auto-Allocation of Expenditures WorksheetIn this worksheet, expenditure data you provided in Worksheet 2. Expenditures are automaticallyallocated based on patients by payer category based on data you provided in Worksheet 1.Patients. We utilized this automatic allocation approach to minimize your time and resources.However, we recognize the possibility that our approach may materially misallocateexpenditures for some CHCs. Therefore, please review this allocation for reasonableness. Ifthere are expenditures that you believe are materially misallocated, please contact PatrickMcMahon at Dobson | DaVanzo [703.307.2292 (cell) or [email protected]] to make adjustments to the automatic allocations.


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3. FTEs and Compensation WorksheetFTEs and Compensation data will enable us to develop an additional assessment of the economicimpact of CHP and CHCs by understanding the geographic distribution of CHP and CHCemployees’ residences. This geographic understanding will better enable us to model thedistribution of CHC and CHP economic impact from employees’ spending of compensationthroughout Washington State. Information you provide will be used to model CHP’s and yourCHC’s economic impact on Washington State and on specific counties in Washington State.

For example, Memorial Clinic in Springfield County has ten full-time staff members who live inSpringfield County and two full-time staff members who live in Richland County. For the tenSpringfield County residents, much of their compensation will likely be spent in SpringfieldCounty for such items as housing, fuel, and groceries. Similarly, the Richland County residentswill likely spend much of their compensation in Richland County.

1. In this worksheet, we are seeking to distribute your FTEs and Compensation 2006 byemployees’ counties of residence in 2006. We include the dates 01/01/2006 to 012/31/2006 toreinforce our ideal for calendar year data. Should the financial data you provide cover differentdates, use the same dates covered in your financial data. If is not possible to provide historicalFTE employee data, please estimate the number of employees, using current information as aproxy measure for geographic distribution, and note this use in a Comment / Question field onthe Basic Info worksheet.

2. We will need to utilize data for the county of residence for your employees. Beginning in cellA3 (County 1 / ZIP+4 / ZIP***), please list the County or ZIP+4 or ZIP Code of youremployees. For example, enter Richland for an employee that lived in Richland County in 2006.

We understand that your accounting and/or personnel systems may not record the countyof residence of your employees and that investigating this may be too time-consuming foryou. If that is the case, please utilize the ZIP+4 Code for FTEs and Compensation. If theZIP+4 Code is unavailable, please utilize the 5-digit ZIP Code.

If it is easier for you, you may choose to summarize information for multiple employeesthat lived in the same county or the same ZIP Code. Should it be easier to report eachemployee separately, then –by all means– list each employee on a separate line.

3. For each County / ZIP+4 / ZIP, please provide us with the counts of FTEs and Compensation(salaries, benefits, and taxes). For our purposes one FTE is the equivalent of one full-timesalaried employee, or 2,080 hours of hourly wages. For example, one full-time individualworking 2,080 hours would be one FTE; similarly, part-time two individuals working 1,040hours would be one FTE.

4. As with other worksheets, ten counties are visible in the initial survey instrument. Additionalrows are available in the worksheet, but are hidden to make the worksheet easier to use. Shouldyou need to access additional rows, please “un-hide” these rows. Please contact us should youneed assistance.

Dobson | DaVanzo


Screen shots of the Microsoft Excel survey instrument are as follows:

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A closer view of the instructions for the Auto-Allocation of Expenditures worksheet is as follows:

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The Economic and Clinical Impact of Community Health Centers in Washington State

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