Health Centers Will Save Billions Under Health Care Reform Act, Says Study

The recently enacted health care reform legislation provides an additional $11 billion in funding for community health centers, or CHCs, during the next five years, and, according to a new research brief, this will enable CHCs to double the number of people they serve by 2015. The cumulative effect should produce at least $180 billion in system-wide health care savings by 2019, say the brief's authors.

Findings from the policy research brief, "Strengthening Primary Care to Bend the Cost Curve: The Expansion of Community Health Centers Through Health Reform," (13-page PDF; About PDFs) which was conducted by the Geiger Gibson/RCHN Community Health Foundation Research Collaborative at the George Washington University School of Public Health and Heath Services in Washington, were released during a press conference here on June 30.

"Health centers reduce hospitalizations, emergency department use, (sub)specialty use and provide quality care, thereby saving money," said Leighton Ku, Ph.D., M.P.H., the lead author of the brief and a professor of health policy at the George Washington University School of Public Health and Health Services. "We are not alone in asserting that health centers are an efficient way to provide care. There is certainly a lot of research that consistently shows this."

The health care reform measure, known as the Patient Protection and Affordable Care Act, will bring a projected 32 million more people into the health care system by 2014, creating an even greater demand for primary care services and raising a number of questions in the process.

"Are we going to have doctors and places for (patients) to go where they can get that care?" asked Ku, framing the issue during the press conference. "And will we be able to reduce health care costs over time?"

The research brief addresses these questions by calculating the effect of the expansion of CHCs on patient health care access and health care costs. In the final analysis, the brief concludes that the investment in CHCs will greatly expand access to high-quality care while saving billions in health care costs, thus accomplishing two goals established by the health care reform legislation.

As amended by the Health Care and Education Reconciliation Act, the Affordable Care Act provides $11 billion in dedicated funding for CHCs from 2011 through 2015 in addition to the current annual funding level of $2.2 billion. This investment is likely to increase the number of patients served by CHCs each year from 18.8 million today to 33.8 million by 2015 and to 36.3 million by 2019, according to the brief.

At the same time, the brief asserts, the expansion in CHCs could reduce nationwide medical costs by $181 billion between 2010 and 2019. This amount includes $52 billion in federal Medicaid savings and $33 billion in state Medicaid savings.

The Affordable Care Act also authorizes funding levels beyond the $11 billion in dedicated funding, and if Congress allocates the higher funding levels, the number of patients served by CHCs could reach more than 44 million by 2015 and 50 million by 2019, according to the brief. With that level of funding, CHCs would achieve more than $300 billion in system-wide savings, including $90 billion in federal Medicaid savings and $58 billion in state Medicaid savings.

The nation's CHCs provided services to more than 18 million people at more than 7,000 sites throughout the country last year, essentially serving as patient-centered medical homes. The centers typically provide care to uninsured and underinsured patients, most of whom reside in medically underserved areas. In their current role, the health centers save about $24 billion a year in medical expenditures, savings that were not factored into the current research brief, said Ku.

He added that the projected increases in CHC caseloads under the Affordable Care Act "may seem like a lot. But over the past 10 years, we have already seen community health centers double their caseloads, so they already have a track record.

"They have shown the federal government they can get the funds out -- that they can use these funds effectively and are able to expand caseloads effectively."

In calculating increased CHC caseloads, Ku and other researchers first asked how many people the health centers could serve in the future. "To do this we looked at the current mix of revenues and patients being served by the centers, and we projected forward," Ku said.

When projecting CHC case loads, the researchers considered other factors, including medical inflation, increases in the number of insured individuals and higher funding levels. Two factors acting in tandem -- additional grant funding and greater insurance coverage -- will act synergistically to enable health centers to grow very rapidly, Ku said.

The researchers relied on economic models and the 2006 Medical Expenditure Panel Survey to calculate projected CHC health care savings during the next several years under the health care reform bill. They found a $1,100 difference in overall medical care costs between patients who use CHCs and those who don't, according to Ku. When researchers multiplied that cost difference by caseload growth during the next five years and 10 years, they found significant costs savings.

Sen. Bernard Sanders, I-Vt., who also spoke at the press conference, said the investments in CHCs under the Affordable Care Act represent a "revolution in primary care," one that will improve patient care and save money.

"Give people access to doctors, keep them healthy, and we save money," Sanders said.