Community Health Centers Save Billions in Health Care Costs, Says Report

The nation's community health centers, or CHCs, save billions of dollars each year in public and private health care expenditures by relying on a primary care system that employs a patient-centered medical home model to provide and coordinate care, according to a new report released Aug. 6.

"We absolutely believe that the answer to America's health care crisis is to ensure that every person living (in the United States) has a medical home," said Dan Hawkins, senior vice president for policy and programs for the National Association of Community Health Centers Inc, or NACHC, during an Aug. 6 press conference here announcing the release of the report. NACHC conducted the study the report is based on in concert with the AAFP's Robert Graham Center here and Capital Link.

The study outlined in "Access Granted: The Primary Care Payoff," (24-page PDF: About PDFs) calculated the savings generated by the nation's CHCs and the economic benefits provided by the centers to local communities. It found that people who receive most of their care from CHCs have 41 percent lower costs than those who access care elsewhere, resulting in savings of $10 billion to $17 billion a year. By investing another $3 billion in the centers, the federal government could bring as many 30 million people under the care of CHCs by 2015, which would save $23 to $40 billion annually in health care costs, according to the report.

"We know the cost of health care is a huge source of concern for the policy-makers and thought leaders debating health reform," said Hawkins. "We submit that there is a payoff … for the up-front investment of dollars into giving everyone a regular source of primary health care, a health care home."

The nation's 1,100 CHCs, which were funded at about $2 billion in 2007, provide care to more than 16 million people at 6,000 sites throughout the United States. They do not turn anyone away based on insurance status or ability to pay, and, as a result, they serve as a true safety net, providing care for large numbers of indigent patients. Seven out of 10 CHC patients, for example, live in poverty. CHCs serve one in every five low-income, uninsured individuals, one in nine Medicaid beneficiaries, and one in four low-income minorities.

The centers operate as true medical homes, providing a consistent and comprehensive source of health care that also includes, in many instances, dental and mental health services, case management, transportation, and outreach.

"This report is very exciting to a physician such as myself because it validates what we are doing in economic terms," said Virgilio Licona, M.D., of Fort Lupton, Colo., a member of the AAFP Board of Directors and associate medical director for Salud Family Health Centers. "That is the language we need to be speaking right now if we are going to be able to affect policy makers in terms of redirecting our system."

Unlike other industrialized countries, the United States does not base its health care system on primary care. But by adopting a primary care-based system, the United States could save $67 billion annually, said Licona, citing a statistic in the report. He described the patient-centered medical home as the "key" to primary care, and the community health system as "one of the keys to providing primary care in this country."

The study is the second in a series of reports released since March. The first report, "Access Denied: A Look at America's Disenfranchised," (43-page PDF About PDFs) found that 56 million Americans are medically disenfranchised, meaning they have inadequate or no access to primary care physicians. That report was produced by NACHC and the Robert Graham Center.

The current report relies on data from the Medical Expenditure Panel Survey, or MEPS, to compare the costs of a representative sampling of patients who received care through CHCs and those who accessed care from other sources. In 2004, about 213 million people sought care at a medical office, and about 6.8 million visited a CHC at least once, according to the report. Researchers used MEPS' own calculations of total medical expenditures, including hospitalizations and emergency room visits, to calculate cost savings. They found that CHC patients spent about $2,569 per year on each patient's care, compared with $4,379 per patient per year for those who did not receive the majority of their care from a CHC, a 41 percent difference.

Unlike other studies, the "Access Granted" report gauges the economic impact of CHCs on local communities using an economic modality developed by the U.S. Department of Agriculture and the Minnesota IMPLAN Group Inc. to analyze the direct, indirect and induced impact of CHCs on local communities. CHCs directly injected nearly $7.3 billion into local economies, while employing nearly 90,000 full-time workers in 2005, according to the report.

The indirect effect of the centers -- money spent by the centers in local communities -- totaled $1.1 billion and supported 10,200 full-time equivalent jobs in 2005, said the report. Finally, employees of the health centers spent enough in their communities in 2005 to generate $4.2 billion in induced economic activity, thereby supporting nearly 43,000 jobs, the report found.

"Not only do health centers contribute to the physical, dental and mental health of their communities, but they also contribute in very significant ways to a community's economic health in the broadest sense," said Allison Coleman, CEO of Capital Link.