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FY 2009 Budget Justification

Health Centers

  FY 2007
FY 2008
FY 2009
FY 2009 +/-
FY 2008
BA $1,943,484,000 $2,021,737,000 $2,047,737,000 +$26,000,000
FTCA $44,555,000 $43,285,000 $44,055,000 +$770,000
Total, HC $1,988,039,000 $2,065,022,000 $2,091,792,000 +$26,770,000
FTE 19 20 20  

Authorizing Legislation: Section 330 of the Public Health Service Act; as amended by Public Law 107-251, the Native Hawaiian Health Care Act of 1988; as amended by Section 9168 of the Public Law 102-396, and Section 224 of the Public Health Service Act.

FY 2009 Authorization Expired
Allocation Method Competitive Grant

Program Description and Accomplishments
Health Centers are community-based and patient-directed organizations that serve populations lacking access to high quality, comprehensive, and cost-effective primary health care. These include low income populations, the uninsured, those with limited English proficiency, migrant and seasonal farmworkers, individuals and families experiencing homelessness, and those living in public housing. For over 40 years, Health Centers have provided a “health care home” through the delivery of comprehensive, culturally competent, quality primary health care that often includes access to pharmacy, mental health, substance abuse, and oral health services regardless of a patient’s ability to pay. The Program targets the nation's neediest populations and geographic areas and currently funds over 1,000 Health Center grantees that operate approximately 4,000 service delivery sites in every state, the District of Columbia, Puerto Rico, the Virgin Islands, and the Pacific Basin. More than half (53 percent) of all Health Centers serve rural populations. In 2006, Health Centers served 15 million patients, providing over 59 million patient visits, at an average cost per patient of about $538 dollars (including Federal and non-Federal sources of funding). Patient services are supported through Federal health center grants, Medicaid, Medicare, the State Children’s Health Insurance Program (SCHIP), other third party, self pay collections, other Federal grants and State/local/other resources.
Health Centers serve a diverse patient population:

  • People of all ages: Approximately 37 percent of patients in 2006 were children (age 19 and younger); about 7 percent were 65 or older.
  • People without and with health insurance: Four in 10 patients were without health insurance in 2006. While the proportion of uninsured patients of all ages has held steady at nearly 40 percent, the number of uninsured patients increased from 4 million in 2001 to 6 million in 2006, proportionate to the growth in Federal health center funding.
  • People of all races and ethnicities: About two-thirds of Health Center patients are minorities. In 2006, 23 percent of Health Center patients were African American and 36 percent were Hispanic/Latino — almost twice the proportion of African Americans and over two and a half times the proportion of Hispanics/Latinos reported in the overall U.S. population.
  • Special Populations: Some Health Centers also receive specific funding to focus on certain special populations including migrant and seasonal farmworkers, individuals and families experiencing homelessness, those living in public housing, and Native Hawaiians. In 2006 Health Centers served over 807,000 migrant and seasonal farmworkers and their families, nearly 829,000 individuals experiencing homelessness, over 129,000 residents of public housing and over 6,000 Native Hawaiians.
    • Migrant Health Centers – In 2006, HRSA-funded health centers served more than 807,000 migrant or seasonal farmworkers and their families. It is estimated that HRSA-funded health center programs serve more than one quarter of all migrant and seasonal farmworkers in the United States. The Migrant Health Center program provides support to health centers to deliver comprehensive, high quality, culturally-competent preventive and primary health services to migrant and seasonal farmworkers and their families with a particular focus on the occupational health and safety needs of this population. Principal employment for both migrant and seasonal farmworkers must be in agriculture.
    • Health Care for the Homeless Program – Homelessness continues to be a pervasive problem throughout the United States, affecting rural as well as urban and suburban communities. According to a recent national survey, it is estimated that 744,000 people are homeless on a given night and 2 to 3 million are homeless over the course of a year. The Health Center for the Homeless Program is a major source of care for homeless persons in the United States, serving patients that live on the street, in shelters, or in transitional housing. In 2006, HRSA funded health centers served nearly 829,000 persons experiencing homelessness. Health Care for the Homeless grantees recognize the complex needs of homeless persons and strive to provide a coordinated, comprehensive approach to health care including substance abuse and mental health services.
    • Public Housing Primary Care Health Centers – The Public Housing Primary Care Program provides residents of public housing with increased access to comprehensive primary health care services through the direct provision of health promotion, disease prevention, and primary health care services. Services are provided on the premises of public housing developments or at other locations immediately accessible to residents. In 2006, HRSA funded health centers served over 129,000 residents of public housing.

    Native Hawaiians – The Native Hawaiian Health Care Program, funded within the health center appropriation, improves the health status of Native Hawaiians by making health education, health promotion, and disease prevention services available through the support of the Native Hawaiian Health Care Systems. Native Hawaiians face cultural, financial, social, and geographic barriers that prevent them from utilizing existing health services. In addition, health services are often unavailable in the community. The Native Hawaiian Health Care Systems use a combination of outreach, referral, and linkage mechanisms to provide or arrange services. Services provided include nutrition programs, screening and control of hypertension and diabetes, immunizations, and basic primary care services. In 2006, Native Hawaiian Systems provided medical and enabling encounters to more than 6,163 people.

Allocation Method: Public and non-profit private entities, including tribal, faith-based and community-based organizations are eligible to apply for funding under the Health Center Program. All Health Center grants are awarded based on a competitive process that includes an assessment of need and merit. In addition, Health Center grantees are required to compete for their existing service areas at the completion of every project period (generally every 3 to 5 years). Grant opportunities are announced nationally and applications are then reviewed by objective review committees, composed of experts who are qualified by training and experience in particular fields related to the Program.

Funding decisions are made based on committee assessments, announced funding preferences and program priorities. In addition to the Objective Review Committee (ORC) score, various statutory awarding factors are applied in the selection of Health Center grants. These include funding preferences for applications serving a sparsely populated area; consideration of the rural and urban distribution of awards (no more than 60 percent and no fewer than 40 percent of people served come from either rural or urban areas); and a requirement for continued proportionate distribution of funds to the special populations served under the Health Center Program.

Health Centers demonstrate performance by increasing access, improving quality of care and health outcomes, and promoting efficiency.

Increasing Access: Health Centers continue to serve an increasing number of the Nation’s medically underserved. The number of Health Center patients served in 2006 was 15 million, exceeding the annual target. This increased access beyond the 10.3 million patients served in 2001 represents over a 46 percent increase within a 5-year period. Of these 15 million patients served, 92 percent were at or below 200 percent of the Federal poverty level, 64 percent were from racial/ethnic minority groups, and 40 percent were uninsured. Success in increasing the number of patients served has also been due in large part to the development of new Health Centers, new satellite sites, and expanded capacity at existing clinics. Through FY 2007, the President’s Health Centers Initiative, which began in FY 2002, has impacted over 1,200 communities including the addition of 337 new access points and significantly expanded sites in FY 2007. Health Center expansion exceeded targeted goals for each year of the Presidential Initiative.

Improving Quality of Care and Health Outcomes:
Health centers continue to provide quality primary and related health care services, improving the health of the Nation’s underserved communities and vulnerable populations. For example, by monitoring timely entry into prenatal care, the program assesses both quality of care as well as Health Center outreach efforts. Identifying maternal disease and risks for complications of pregnancy or birth during the first trimester can also help improve birth outcomes. Results over the past few years demonstrate improved performance as the percentage of pregnant Health Center patients that began prenatal care in the first trimester grew from 57.8 percent in 2000 to 61.3 percent in 2006 virtually meeting the target of 61.4 percent. It should also be noted that Health Centers serve a higher risk prenatal population than seen nationally, making progress on this measure a particular accomplishment.

Appropriate prenatal care management can also have a significant effect on the incidence of low birth weight (LBW), the risk factor most closely associated with neonatal mortality. Monitoring birth weight rates reflects both on quality of care and health outcomes for Health Center women of child-bearing age, a key group served by the Program. This measure is benchmarked to the national rate to demonstrate how Health Center performance compares to the performance of the nation overall. In 2005, 7.3 percent of Health Center patients had LBW infants, a rate that was 11 percent lower than seen nationally (8.2 percent - 2005 national LBW rate). The rate of LBW in Health Centers in 2006 fell slightly to 7.2 percent, as compared to the preliminary national LBW of 8.3 percent. Health Center LBW rates have continued to follow a steady pattern at about 7 percent, while increases have been observed in the national rate (Source: Hamilton BE, Martin JA, Ventura SJ. Births: Preliminary data for 2006. National vital statistics reports; vol 56 no 7. Hyattsville, MD: National Center for Health Statistics. 2007).

Health Center patients, including low-income individuals, racial/ethnic minority groups and persons who are uninsured, are more likely to suffer from chronic diseases such as hypertension and diabetes. Clinical evidence indicates that access to appropriate care can improve the health status of patients with chronic diseases and thus reduce or eliminate health disparities. Two measures focus on quality of care and improved health outcomes for these two highly prevalent chronic conditions among Health Center patients.

Controlling blood pressure (hypertension) can reduce the health risk associated with conditions such as heart disease and stroke. However, with increasing rates of hypertension, effective control is a particularly ambitious undertaking as improvements in such a chronic condition often requires treatment with both lifestyle modifications, usually as the first step, and, if needed, with medications. According to CDC data for 1999-2002, only 32 percent of adults nationally demonstrated adequate high blood pressure control while the actual performance for the Health Center Program in 2006 not only met, but also exceeded the annual target at 44.4 percent. A second, health outcome measure for Health Centers that focuses on control of diabetes is developmental. Clinical evidence indicates that controlling blood glucose through activities such as chronic care management provided in Health Centers, benefits people with either type-1 or type-2 diabetes. Future progress on this developmental measure will be monitored and reported annually by all grantees via the Uniform Data System (UDS) beginning in 2009.

Promoting Efficiency: Health centers provide cost effective, quality primary health care services. The Program’s efficiency measure focuses on maximizing the number of Health Center patients served per dollar as well as keeping cost increases below annual national health care cost increases while maintaining access to high quality services. In looking at growth in total cost per patient, the full complement of services (medical, dental, mental health, pharmacy, outreach, translation, etc.) that make Health Centers a "health care home" are captured. In 2005, the average cost per patient served at Health Centers grew by only 2.1 percent. In 2006, costs grew at a slightly higher rate (4.6 percent), but performance was under the target growth rate of 5.4 percent. This is about 33 percent below the 6.8 percent projected growth rate for national health expenditures in 2006. In fact, in the past 4 years, cost increases at Health Centers have been at least 20 percent below national cost increases. By restraining increases in the cost per individual served at Health Centers below national per capita health care cost increases, the Program has served a volume of patients that otherwise would have required additional funding to serve annually and demonstrates that it delivers its high quality services at a more cost-effective rate. Success in achieving cost-effectiveness may in part be related to Health Centers’ use of a multi and interdisciplinary team that treats the “whole patient.” This, in turn, is associated with the delivery of high quality, culturally competent and comprehensive primary and health care services that not only increases access and reduces health disparities, but promotes more effective care for Health Center patients. Evaluation studies demonstrate that Medicaid beneficiaries receiving care from a Health Center were less likely to be hospitalized than Medicaid beneficiaries receiving care elsewhere and were also less likely to inappropriately visit the emergency room when compared to Medicaid beneficiaries with another provider as their usual source of care.

Program Assessment Rating Tool: An Office of Management and Budget (OMB) Program Assessment Rating Tool (PART) reassessment of the Health Center Program was conducted in 2007, and the Program received the highest possible rating of Effective. The review found that evaluations of the Program demonstrate that it is effective at extending access and delivering high quality health care to underserved populations and that the Program has demonstrated progress in meeting long-term and short-term performance goals. It also found that collaboration with programs that share common goals has been improved since the initial PART assessment in 2002. In addition, the Program is implementing improvements that include: 1) completion of a national survey of Health Center patients to expand and update information on program performance and impact; and 2) program-wide collection of core quality of care and health outcome performance measures, such as hypertension and diabetes-related outcomes, from all grantees by 2009.

External Evaluation:
In addition to internal monitoring of Health Center performance, peer reviewed literature and major reports continue to document that Health Centers successfully increase access to care, promote quality and cost-effective care, and improve patient outcomes, especially for traditionally underserved populations.

Health Center uninsured patients are more likely to have a usual source of care than the uninsured nationally (98 percent vs. 75 percent) (Carlson et al. Journal of Ambulatory Care Management 24, 2001, Starfield and Shi. Pediatrics 113, 2004).

Health Centers provide continuous and high quality primary care and reduce the use of costlier providers of care, such as emergency departments and hospitals (Proser M. Journal of Ambulatory Care Management 28(4), 2005).
Uninsured people living within close proximity to a Health Center are less likely to have an unmet medical need (Hadley J and Cunningham P. Health Services Research 39(5): 2004).

Health Centers have demonstrated success in chronic disease management. A high proportion of Health Center patients receive appropriate diabetes care (Maizlish et al. American Journal of Medical Quality 19(4), 2004).
Medicaid beneficiaries receiving care from a Health Center were less likely to be hospitalized than Medicaid beneficiaries receiving care elsewhere (Falik M. et al. Medical Care 39(6), 2001).

Health Center Medicaid patients were 11 percent less likely to be inappropriately hospitalized and 19 percent less likely to visit the emergency room inappropriately than Medicaid beneficiaries who had another provider as their usual source of care (Falik M. et al. Journal of Ambulatory Care Management 29, 2006).

Health Centers have been found to improve patient outcomes and reduce racial and ethnic disparities in health care (O'Malley AS, et al. Health Affairs 24(2): 2005, Shin P, Jones K, and Rosenbaum S. George Washington University: 2003, Shi, L., J. Regan, R. Politzer, and J. Luo. International Journal of Health Services 31(3): 2001).

Health Center low birth weight rates continue to be lower than national averages for all infants. In particular, the Health Center low birth weight for African American patients is lower than the rate observed among African Americans nationally (10.7 percent vs. 14.9 percent respectively) (Shi et al. Health Services Research, 39:2004).

Health Center patient rates of blood pressure control were better than rates in hospital affiliated clinics, the Veterans Affairs health system, or in commercial managed care populations (Hicks LS. et al. Health Affairs 25, 2006). Funding includes costs associated with grant reviews, processing of grants through the Grants Administration Tracking and Evaluation System (GATES) and HRSA’s electronic handbook, and follow-up performance reviews.

Funding History

FY 2004 $1,617,629,000
FY 2005 $1,734,810,000
FY 2006 $1,785,076,000
FY 2007 $1,988,039,000
FY 2008 $2,065,022,000

Budget Request
The FY 2009 Request of $2,091,792,000 is an increase of $26,770,000 over the FY 2008 Enacted level. This funding level will continue support to over 1,000 health center grantees that provide comprehensive, culturally competent, quality primary health care services through over 4,000 service delivery sites to an estimated 17.05 million medically underserved, low income patients around the nation. The request includes $26,000,000 for the President’s goal of placing health centers in high poverty areas. This will fund up to 40 new access point grants in high poverty areas around the Nation without a health center site. Priority points will be available for applicants demonstrating that they will serve areas (or populations) with a significant percent of the population at or below 200 percent of the Federal Poverty Level (FPL). This option would maintain the Administration’s focus on highlighting the needs of the highest poverty areas, by creating an additional incentive to serve high poverty areas where there is no existing health center. This would allow for open competition at a national level – and applicants would be eligible from all States.

In addition, this level will fund up to 25 planning grants to community-based organizations for projects to plan and develop Health Centers in high poverty areas across the country. This support will enable community-based entities in areas without the benefit of a Health Center to enhance their readiness to implement a health services delivery grant, and in some cases provide an inducement for an organization to address the health care needs of the underserved in a high poverty area where there would otherwise be no expansion activity.

The entire FY 2009 budget request will support the Program’s achievement of its ambitious performance targets. The Program will continue its central goal of increasing access to care for more underserved and vulnerable populations. Based on the final FY 2008 appropriation amounts, Health Centers are projected to serve 16.75 million patients by the end of 2008 and increase further to 17.05 million patients by the end of 2009.

As part of the Program’s efforts to improve quality of care and health outcomes, the Health Center program has established ambitious FY 2009 and out-year targets. For low birth weight, the Program seeks to be at least 11 percent below the national rate. While the measure maintains the current ratio in the next five years, it is ambitious because Health Centers continue to serve a higher risk prenatal population than represented nationally in terms of socio-economic, health status and other factors that predispose Health Center patients to greater risk for low birth weight and adverse birth outcomes. The FY 2009 target for the Program’s hypertension measure is to increase the rate of adult patients with diagnosed hypertension whose blood pressure is under adequate control to 43 percent. This target will be challenging to achieve because improvements in a chronic condition require treatment with lifestyle modifications, usually as the first step, and, if needed, with medication. The Program is developing a fourth measure related to effective management of diabetes for which it will begin collecting data in 2009. Consequently, it does not yet have targets.

The Program will also continue to promote efficiency and aims to keep cost per patient increases at least 20 percent below annual national health care cost increases, as forecasted by the Center for Medicare and Medicaid Services' National Health Expenditure Projections. By benchmarking the Health Center efficiency to national per capita health care cost increases, the measure takes into account changes in the health care marketplace while demonstrating the Program’s ability to deliver services at a more cost-effective rate. The target for FY 2009 is a 5.8 percent increase, a rate that is 20 percent below the projected national growth rate of 7.3 percent. To assist in areas of cost-effectiveness, the program offers technical assistance to grantees to review costs and revenues and develop plans to implement effective cost containment strategies.

The budget request will also support the Program’s ongoing involvement in an agency-wide effort to improve quality and accountability in all HRSA-funded programs that deliver direct health care. One of the key steps the Health Center Program has taken in this area is to establish a core set of clinical performance measures for all Health Centers. The Program has aligned its new required clinical performance measures that all Health Center grantees will begin to report in 2009 with those of national quality measurement organizations, such as the Ambulatory Care Quality Alliance and the National Quality Forum, and are consistent with the overarching goals of Healthy People 2010. Core measures will include: Immunizations; Prenatal care; Cancer screenings; Cardiovascular Disease/Hypertension; and Diabetes.

In addition to tracking these core health outcome indicators, Health Centers will also report data on some of the measures (Low Birth Weight, Diabetes and Hypertension) by race/ethnicity in order to demonstrate progress towards eliminating health disparities in health outcomes. To support quality improvement across all Health Centers, the Program will continue to support National and State-level technical and training programs that promote quality improvements in health center data and quality reporting, clinical and quality improvement, and implementation of innovative quality activities.

The Program continues to promote the integration of Health Information Technology (HIT) into Health Centers as part of HRSA’s strategy to assure that key safety-net providers are not left behind as this technology advances. In addition to supporting funding opportunities around HIT, HRSA will continue its partnership with the Agency for Healthcare Research and Quality (AHRQ) on the HRSA HIT Community Portal designed exclusively for Health Centers, Primary Care Associations and Primary Care Offices to access information about HIT, share best practices, and support collaborative efforts to expand access to HIT services.

Funding will also allow the Program to continue to coordinate and collaborate with related Federal, State, local, and private programs in order to further leverage and promote efforts to expand and improve Health Centers. The Program will continue to work with the AHRQ on HIT, the Centers for Disease Control and Prevention (CDC) to address Migrant Stream Farmworker issues and HIV prevention initiatives, and the National Institutes of Health (NIH) on US-Mexico Border health issues, among others. In addition, the Program will continue to coordinate with the Centers for Medicare and Medicaid Services (CMS) to jointly review section 1115 Medicaid Demonstration Waivers to address any concerns for Health Centers within States. The Program will also work closely with the Department of Justice on the Federal Tort Claims Act (FTCA) program, which provides medical malpractice liability protection to Section 330 supported Health Centers.

FY 2007
FY 2008
President’s Budget
FY 2009
Health Centers $1,943.5 1/ $2,021.7 $2,047.7
Other Sources:      
Medicaid 3,025.0 3,145.0 3,185.0
Medicare 500.0 520.0 530.0
SCHIP 180.0 190.0 190.0
Other Third Party 650.0 675.0 685.0
Self Pay Collections 550.0 575.0 585.0
Other Federal Grants 225.0 235.0 235.0
State/Local/Other 1,565.0 1,625.0 1,650.0
TOTAL $8,638.5 $8,986.7 $9,107.7

1/ Excludes funding for Tort Claims: FY 2007 - $44.6 million, FY 2008 – $43.3 million, FY 2009 – $44.1 million.

See Chart