With a state budget crisis threatening the ability of community health centers to deliver services, the California HealthCare Foundation is chipping in $10 million to a low-interest loan pool designed to ensure clinics are able to provide uninterrupted care.
The California HealthCare Foundation is an independent philanthropy committed to improving the way healthcare is delivered and financed in California.
The state budget stalemate in California has resulted in financial emergencies at many community health centers across the state, shutting off the flow of Medi-Cal reimbursement dollars as of August 1. A recent survey by the California Primary Care Association, the statewide representative of more than 700 community clinics and health centers, found that six in 10 clinics have less than a 30-day cash reserve on hand.
Medi-Cal reimbursement accounts for up to 50 percent of community health center revenue - or approximately $10 million each week statewide. Community health centers are finding it hard to meet payroll and overhead expenses, forcing some to consider reducing patient services or hours of operation or shutting down, according to CHCF officials.
"In the words of Yogi Berra, 'It's dŽjˆ vu all over again,'" said CHCF President and CEO Mark Smith. "Each year the budget impasse forces millions of Californians to wonder whether funding for healthcare, education and other vital services will be there for them. The loan program is designed to help community health centers continue to operate during this cash crunch, so they can remain focused on helping families with real medical problems get the care they need."
Loan underwriting, approval, documentation and servicing will be handled by NCB Capital Impact, a national nonprofit organization with a track record of lending and managing loans to community health centers in California. To qualify, a clinic must be a nonprofit primary care family planning center or tribal clinic in existence for three years prior to loan application. Clinics will be eligible to receive a maximum of $500,000 for 90 days of operating expenses at a nominal interest rate.
Other contributors to the Emergency Working Capital Loan Fund include Catholic Healthcare West, Sutter Health, the Nonprofit Finance Fund, NCB Capital Impact, the CPCA Loan Fund and the Mercy Partnership Fund. The $10 million contribution by CHCF brings the fund's total to $24 million.