1. The Journal of Healthcare Contracting | June 2011 35
community health centers
“Part of running a health center is getting comfort-
able with the unknowns, the uncertainties,” says Wiersma,
who is director of the health center, which has two sites
in Lorain, Ohio, about 30 miles west of
Cleveland on Lake Erie. “You just have to
do that.”
So when Congress decided to chop
$600 million of funding for community
health centers earlier this year, she was pre-
pared, at least as much as anyone can be.
“It’s still a little murky as to how the budget
for community health centers will be ad-
justed for the remainder of 2011,” she says.
“But absolutely, we expect to be affected.”
At press time, it seemed clear that
Health Resources and Services Admin-
istration, the federal agency responsible
for overseeing community health cen-
ters, would continue to provide funding
for continuing operations. “That means
that my health center, along with the 126
most recently funded centers, will con-
tinue to be funded,” says Wiersma. But
expansion plans – such as those that Lo-
rain County shared with a local hospital
system and public housing authority – are on hold. Still,
Wiersma is optimistic.
“We know the need [for care for the underserved]; we see
the demand. We know our local community, and I’m sure it’s
the same here as in hundreds of communities around the
country. We made a case for the need [for community health
center funding], and we submitted the application. And may-
be, in the future, they’ll dust off those applications.”
Started in the 60s
First established in the 1960s, federally qualified health
centers are community-based organizations that serve
populations with limited access to health-
care. Roughly 1,200 centers, with some
8,000 care sites, provide medical, dental
and behavioral healthcare, as well as access
to pharmaceuticals.
Each community health center is on its
own insofar as purchasing medical equip-
ment and supplies. On its website, the Na-
tional Association of Community Health
Centers does offer its members a buyer’s
guide from McKesson Medical-Surgical.
But each center is free to join a group pur-
chasing organization or pursue another di-
rection for purchasing.
To receive federal funding, health centers must:
• Be located in or serve a high-need
community, that is, one that has been
designated as medically underserved.
• Be governed by a community board.
• Provide comprehensive primary
healthcare services, as well as
supportive services, such as education, translation,
transportation, etc.
• Provide services to all, regardless of their ability to pay.
Approximately 70 percent of the 23 million patients
visiting health centers are at or below 100 percent of the
federal poverty level, and 93 percent are under 200 percent
of the poverty level. Thirty-eight percent are uninsured, and
Safetynetsfacefundingcuts
Community health centers lose $600 million in funding; expansion projects on hold
Stephanie Wiersma has been there before, having joined Lorain County Health
& Dentistry – a federally qualified health center – as its first employee 10 years ago.
Stephanie Wiersma
Warren Brodine

2. June 2010 | The Journal of Healthcare Contracting36
community health centers
37 percent are on Medicaid. In 2009, health centers treated
865,000 migrant/seasonal farm worker patients and more
than 1 million individuals experiencing homelessness.
With a staff of 47, Lorain County cares for 11,500 people,
says Wiersma. Seventy-six percent of them are at or below 100
percent poverty level, and 88 percent are below 200 percent.
Funding questions
Community health centers enjoyed a surge of federal funding
and growth during the Bush administration (2001-2009). That
growth accelerated under the Obama administration, in re-
sponse to the economic recession as well as healthcare reform.
The American Recovery and Reinvestment Act of 2009
– the “stimulus act” – injected $2 billion into the nation’s
health centers for construction, renovation, the acquisition
of equipment and health information technology, and sim-
ply to expand services to new and existing communities.
Then the Patient Protection and Affordable Care Act of
2010 – the healthcare reform law – created an $11 billion
trust fund to be spent over five years, $9.5 billion of which
was to be spent on expanding operational capacity, and
$1.5 billion in direct funding for capital. The intent was
to double the number of patients served by community
health centers, from 20 million to 40 million.
The cash was sorely needed, as state funding for com-
munity health centers had been dropping steadily. “I liter-
ally can tell you we could not have hung on much longer
without the funding in March 2009,” says Wiersma. “We
had done everything in our power to be as small as we
could, and still be able to give care to patients, holding out
hope we would get funding.
“We had increased the minimum fee we charged our
uninsured; we had put a cap on the number of appoint-
ments we could schedule for uninsured medical and dental
patients; we had consolidated in terms of space as much
as we could to reduce our rent and overhead; and we were
working with the world’s smallest management team.
“We were driven by the knowledge that what we were doing
was important, and that we had to continue doing it. We ex-
pected funding would come; we hoped it would be in time; and
we knew there is no other safety net provider in Lorain County
with the capacity to care for medical and dental patients who are
low-income, uninsured or otherwise underserved.”
But what the government giveth, the govern-
ment can taketh away. In February of this year,
the House of Representatives – worried about
the federal debt – approved a $1.3 billion reduc-
tion in FY 2011 health center funding. The im-
pact could have been catastrophic. “We would
most likely have closed our doors,” says Wiersma.
As it turned out, in April, the White House
and Congress worked out a budget deal,
which resulted in the $600 million reduction
in funding. While that left room for continu-
ing operations of existing health centers, it
put a kibosh on new construction or expansion.
Hospitals worried
The proposed $1.3 billion in cuts not only had community
health centers worried, but nearby hospitals too, who feared an
influx of primary care patients to their emergency departments.
Those fears remain. “Sometimes it takes a good crisis to find
out how needed you are and the important role you play,” says
Wiersma. In fact, two CEOs from competing local hospital sys-
tems publicly expressed their objection to the proposed cuts.
“Health centers target underserved persons and are of-
ten the only local provider able to care for them in an appro-
priate and efficient setting, freeing up hospital capacity for
true emergency needs,” wrote Dr. Donald Sheldon, presi-
dent and CEO, EMH Healthcare in Elyria, Ohio (about 10
miles southeast of Lorain); and Edwin Oley, president and
CEO, Mercy Regional Medical Center in Lorain.
In Ohio, almost $1 billion is spent annually on avoid-
able ER visits, they wrote. What’s more, studies have shown
“I literally can tell you we
could not have hung on
much longer without the
funding in March 2009.”
– Stephanie Wiersma

3. community health centers
The Journal of Healthcare Contracting | June 2010 37
that Medicaid beneficiaries visiting community health cen-
ters were 19 percent less likely to use the ER for preven-
tive conditions than other Medicaid beneficiaries, they said.
“If avoidable visits to ERs were redirected to community
health centers, the nation could save over $18 billion in an-
nual health care costs.”
The hospital connection
One of the projects that fell victim to the $600 million
funding cut was the plan by EMH, Lorain County Health
Dentistry and the Lorain Metropolitan Housing Au-
thority to open two health center sites in Elyria – one
within walking distance of EMH, and the
other in a public housing complex.
There is precedent for locating community
health centers near – or even inside – hospitals,
says Douglas McDonald, MD, vice president
of medical affairs, EMH Healthcare. “People
still identify the hospital as a site for health-
care,” he says. In addition, when health centers
are situated close to hospitals, they can poten-
tially outsource some services to the acute-care
facility, such as imaging or lab work.
Furthermore, such arrangements open the possibil-
ity for patients to get triaged in the hospital ER; if their
condition is not urgent, they can go to the nearby health
center for treatment. But such systems must conform to
the Emergency Medical Treatment and Active Labor Act
(EMTALA), also known as the patient anti-dumping law,
McDonald points out.
“Much primary care is being delivered in the emer-
gency room setting,” says McDonald. In many cases, the
patients are insured through Medicaid, but have experi-
enced difficulty finding a primary care doctor who will ac-
cept Medicaid reimbursement. Not only is delivering pri-
mary care in the ER unnecessarily expensive, but worse,
it leaves the patient without a good plan for followup
care, he says. The community health center can serve as a
medical home for such patients, who will then use the ER
only for true emergencies.
The second part of the Lorain County project would
have converted an existing public-housing unit to a pri-
mary care site for adults and children. “That would further
enhance [the concept of] bringing care to the back yard of
the people who need it,” says McDonald.
Like Lorain County Health Dentistry, Chicago Fam-
ily Health Center has held discussions with a local hospital
to open up a community health center near the hospital –
in this case, actually inside the hospital. The project is on
hold for now.
“We have to provide multiple points of entry into the
healthcare system,” says CEO Warren Brodine. “There are
some people who want to get their care in the hospital; this
model would be very appealing to them.” At the same time,
it would help reduce the high costs of ER care.
A medical home
Although community health centers’ expansion plans are
on hold, leaders expect the centers to continue to play an
important role in healthcare delivery, particularly as atti-
tudes toward healthcare evolve.
In Ohio, for example, a newly created Office of Health Trans-
formation has laid out nine guiding principles for healthcare in
the future. Among them are:
• Primary care. Transform primary care from a
system that reacts after someone gets sick to a system
that keeps people as healthy as possible.
• Chronic disease. Prevent chronic disease whenever
possible and, when it occurs, coordinate care to improve
quality of life and help reduce chronic care costs.
“Ohio’s community health centers are really well posi-
tioned to serve as health homes,” says Wiersma. “We’re all
looking forward to making a contribution. We have the infra-
structure. It’s what we’ve been doing.” JHC
“Much primary care is
being delivered in the
emergency room setting.”
– Douglas McDonald, MD, vice president
of medical affairs, EMH Healthcare