While federal stimulus dollars flow into system, state cuts weigh on programs

For leaders of the North Bay's health care clinics, financial stability is not as simple as new federal cash on the one hand picking up where the state cut in the other.

At the root of the centers' funding paradox is that while federal economic stimulus dollars are flowing to building and expansion projects, the California budget crisis is bringing cuts to services and the recession is increasing the number of uninsured seeking their help.

"In a year I expect to have a beautiful, up-to-date date, perfectly equipped building run by an organization in survival mode," Alliance Medical Center CEO Jack Neureuter said of the challenge.

Though everyone recognizes the good intentions behind the close to $10 million in stimulus that has already poured into North Bay system, the funding does not necessarily align with the system's key financial challenge -paying for the increasing number of uncompensated patients, amplified by the deepening recession.

So far, the region's 10 federally-qualified health centers in Sonoma, Napa, Marin and Mendocino have received two rounds of federal recovery act funding, which is part of the largest single investment in the programs since they were created. But restrictions on the dollars make it impossible to boost clinic financials losing funding from cuts to reimbursement for care.

"I would like to say we will be able to absorb all the cuts the state has proposed, but really it will be a struggle to survive without drastic reform to the system," Mr. Neureuter said.

Clinic leaders say instead, the stimulus grants limit spending primarily to hiring more staff, updating equipment and technology or making building renovations or expansions.

The stimulus "is great and we are very happy to have those dollars, but it does not pay for anything related to day-to-day business," said West County Health Centers Executive Director Mary Szecsey.

"It does not in any way backfill the loss of funds from state."

Since the creation of community clinics, which are now by far the largest provider of primary care in the region, the organizations have been funded primarily through reimbursements from the state and federal government for care provided to publicly funded patients, or those either on Medi-Cal, Medicare or other low-income programs.

But in the last few years, as the state's budget situation has continued to worsen, more and more cuts have been made to the public health insurance system and the number of uncompensated patients has quickly outweighed paid care.

Also, beginning July 1, the state eliminated funding for "optional Medi-Cal benefits," or reimbursement for adult dental (outside of emergency care), mental health and podiatry, among others. The change will mean a loss of about half a million dollars in revenue for some clinics, with a total loss of about $15 million region-wide.

Most regional health centers said they would sustain adult dental programs for as long as they can by beefing up children's care, which is still reimbursed, but many foresee an end to the programs without other funding.

Also, no matter the result of the current budget tug-a-war, the clinics will undoubtedly incur other hard knocks. Legislators have proposed eliminating several other health center programs, including Indian Health, Seasonal Agricultural and Migratory Workers, Rural Health Services Development and the general fund portion of the Expanded Access to Primary Care programs.

Additionally, programs for adult day health care, Healthy Families, family planning, HIV education and prevention, drug assistance and medication pricing assistance could also be axed.

Stimulus funds received so far in two rounds:

Alliance Medical Center, Healdsburg, Windsor: $864,148

Coastal Health Alliance, Point Reyes: $638,263

Clinic Ole, Napa: $1,307,177

Marin Community Clinics: $1,086,137

Mendocino Coast Clinics, Ft. Bragg: $684,081

Mendocino Community Health Clinic, Ukiah: $1,429,599

Petaluma Health Center: $993,749

Sonoma Valley Community Health Center, Sonoma: $661,637

Southwest Community Health Center, Santa Rosa: $1,337,292

West County Health Centers, Guerneville, Occidental, Sebastopol: $751,449

Submit items for this column to D. Ashley Furness at afurness@busjrnl.com, 707-521-4257 or fax 707-521-5292.