Rising need strains health clinics’ finances

As community clinics increasingly provide healthcare for the poorest of the poor, many are becoming more financially unstable, according to a new report released this week.

In 2004, 63% of California community clinics were breaking even or running a deficit. Two years later, 68% of community clinics were breaking even or running a deficit, according to an analysis of state and Internal Revenue Service records by Capital Link, a Boston-based nonprofit consulting group, and the Oakland-based California HealthCare Foundation.

The trend, if it continues, could cause problems for public health advocates and government officials, who have been urging poor and uninsured people to seek treatment at clinics rather than emergency rooms.

Community clinics “are an integral part of our safety net system . . . yet they are vulnerable financially,” said Melissa Schoen, a senior program officer for the California HealthCare Foundation.


The report showed that 39% of low-income Californians used community clinics for healthcare in 2003 and that 53% used them in 2006.

“If there continues to be financial pressure on clinics, and revenue decreases but demand increases, you could start to see the loss of safety-net clinics,” Schoen said.

The problem is expected to be exacerbated as more people lose jobs and lose their healthcare coverage, Schoen said, which could lead them to consider community and free clinics.

The analysis also showed how sensitive community clinics are to government reimbursements; 52% of the clinics’ revenue came from reimbursements from Medicare and Medi-Cal, the government health programs for the elderly and the poor; an additional 23% came from federal, state and county grants and contracts.


The figures “highlight the vulnerability” community clinics have when government officials consider reducing Medi-Cal reimbursements or other state funding, Schoen said.

Community clinics have become an important backbone in Los Angeles County.

Last year, as Los Angeles County-USC Medical Center downsized the number of available beds when it moved into a smaller facility, hospital officials urged its patients to seek primary and preventive care at community clinics instead of crowding into emergency rooms because of worsening health.