Friday, February 15, 2013

Sequestration Threatens Growth, but Health Centers Have Opportunity to Act

This year offers plenty of promise and uncertainty for health centers as ACA implementation continues and federal and state budgets come into focus.  On the front burner is the still unresolved sequestration mandate slated to happen on March 1st.  If Congress is unable to negotiate an alternative, all domestic discretionary programs will face automatic funding cuts.  For health centers, that likely will mean a 9% cut for the remainder of FY13.  As you know, these reductions will have very real consequences for patients seeking care.  They will also negatively impact efforts to prepare for full implementation of the exchanges and other Affordable Care Act provisions.  At the same time, the Continuing Resolution that governs spending for the remainder for the remainder of the FY13 fiscal year expires in late March, so Congress may choose to rework the sequester and finalize appropriations as part of the same package.  

Although it isn’t clear how the congressional fight will be resolved, there are several steps health centers can take to stay informed and ensure that operations continue smoothly.
1.              Keep up to date with developments on Capitol Hill. Visit to stay informed and receive updates from NACHC on where things stand.
2.              Consider an Economic Impact Analysis for your operations or capital project.  In addition to providing access to quality care, health centers provide extraordinary economic benefits to the communities they serve.  It is critical that policymakers understand this aspect of health centers when debating funding issues.  
3.              Make sure your financial house is in order. Now is a great time to evaluate your health center’s operating performance and balance sheet health, in particular your health center’s working capital.  How will federal funding changes affect your bottom line? Do you have adequate cash reserves to accommodate these changes?  Consider a Financial Trends and Productivity Analysis to evaluate your health center’s performance along key financial and operational benchmarks.