Thursday, June 28, 2012

As Affordable Care Act Advances, Health Centers Challenged to Meet Capital Needs

By Allison Coleman, Chief Executive Officer

Capital Link announces the release of Capital Plans and Needs of Health Centers: A National Perspective, a study conducted to determine the current capital plans of community health centers across the United States and whether those plans, if funded and implemented, would be sufficient to provide the facilities necessary to serve 40 million patients, the Affordable Care Act goal for access to care. This study was supported by a Cooperative Agreement with the Health Resources and Services Administration, Bureau of Primary Health Care.

Capital Link requested information from 1,200 health centers, resulting in a 30% response rate. 76% indicated that they had specific plans to initiate capital projects within the next five years, which Capital Link estimates will total approximately $5.7 billion. These planned projects should accommodate an additional 6,629 providers and 6.9 million patients, tremendous progress but still some distance from the needed capacity.

To serve 40 million patients annually and provide space for an additional 15,303 providers, Capital Link estimates that health centers will need to take on additional capital projects costing about $7.4 billion. Combined with planned projects of $5.7 billion, this additional capacity brings the total capital need to $13.1 billion.

Health centers have secured about 33% of the cost of planned projects, with federal grants accounting for a third of that figure. Extrapolating from that data, Capital Link estimates that health centers nationally have likely secured at maximum of $1.9 billion for planned capital development, but a funding gap of at least $3.8 billion for planned capital projects likely remains. Given that projects totaling at least $7.4 billion have not yet been planned nor funding secured, health centers still have an enormous gap of $11.2 billion to bridge with additional equity and/or debt financing and through securing leased space.

For detailed results, access the complete report online at http://www.caplink.org/resources/reports

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