Study on the pandemic’s financial impact on California’s CHCs finds largest centers suffered largest losses

A study from Capital Link on the pandemic’s financial impact on California’s Community Health Centers (CHCs) found that the largest centers suffered the most losses. 

The study found that the centers that had the most capacity pre-pandemic, and those that serve 68% of all patients and 69% of Medi-Cal patients overall, face the most financial risk. 

 

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According to the study:

“They are on track to emerge from the pandemic in a significantly weaker financial position than before the pandemic, potentially curtailing their ability to ‘bounce back’ to provide the range and volume of care they were previously providing.”

Centers that serve the highest proportion of Medi-Cal patients sustained almost all of the financial losses. Those centers that served between 20,000 and 250,000 Medi-Cal patients in 2019 sustained 96% of the losses. This averages out to a loss of $145 per patient.

Revenue size was not the only indicator, the largest centers bore the brunt of the financial losses in the pandemic even when measured by the number of patients and the number of sites. 

The centers with more than 31,000 patients in 2019 had a 12% loss, while the centers with fewer than 6,500 patients had a 17% gain. Centers with 14 to 52 sites also had a 12% loss, while the centers with three or fewer sites experienced a 5% gain.

The study also found that smaller CHCs may fare better because they entered 2021 in a stronger financial position due to their higher eligibility for pandemic relief funds.

Many of the largest CHCs were not eligible to apply for Paycheck Protection Program (PPP) loans. The study found that only 42% of centers with revenues in the top quartile, above $36.7 million, received a PPP loan. In contrast, 100% of the centers in the bottom three quartiles received a loan.

Bureau of Primary Health Care grant funding per patient averaged around $153 per patient for the centers in the lowest quartile. However the centers in the top quartile received an average of $44 per patient. 

The authors of the study say there is significant risk to the health center system in the state.

“Based on these findings, there is significant risk that the health center system in California will be greatly weakened in a post-pandemic future, absent additional funding support — especially for the largest centers. While federal support is on the horizon, it will be important to pay close attention to the financial stability of these health centers if California hopes to preserve the integrity of the safety net.”