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The Race to Build More Federally Funded Health Centers in New Jersey

Beth Fitzgerald | January 13, 2012

Capacity is already a concern, healthcare reform is only expected to exacerbate it.

New Jersey's federally qualified health centers are very busy places -- understandably so, given that most of their patients are either uninsured or on Medicaid. But for Kathy Grant Davis, president of the New Jersey Primary Care Association, current capacity is only one of her concerns. She is looking to 2014, when federal healthcare reform will drive up the number of patients who rely on FQHCs.

In order to serve that growing population, Davis plans on opening another 30 FQHC locations. But Davis said keeping the expansion on track will hinge in large measure on New Jersey winning more federal money.

Currenlty New Jersey's 20 federaly qualified health centers operate 105 sites that deliver medical care to more than 400,000 patients statewide. That number is expected to surge above 500,000 when the Affordable Care Act expands Medicaid eligibility and brings subsidized health coverage to many of the state's low- and moderate-income residents.

New Jersey's FQHC expansion was launched in 2011 and approved by the federal government, Davis said. But federal money to fund new centers is disbursed through a competitive process among the 50 states and the District of Columbia. Last year 900 proposed centers applied for funding; 70 were approved. New Jersey landed funding for one new center in Hackettstown, Davis said.

"We have to compete with Mississippi and Alaska and Louisiana for funding," Davis said. "Competition for those dollars is extremely tough." The federal government provides $650,000 a year for operating expense. Centers also are reimbursed by Medicaid New Jersey FamilyCare, the state's expansion of Medicaid. The centers also do fundraising to cover their operating budgets.

Davis said she is continuing to pursue the expansion plan, "and we hope that when the federal government announces a new round of grants, that we'll be more successful."

Freehold and Somerset are among the places new centers are being proposed, Davis said. Currently there are no FQHC sites in Somerset County, but because the county as a whole is fairly affluent, the center may not get federal funding. "But we know there are pockets where there is a need," she said. "So we are still moving ahead with our plan," to launch an FQHC in Somerset.

Operating expenses are only part of a center's economic profile. Building a new facility or renovating a site requires "low-interest financing, tax credits, whatever it might be, to make sure you have the capital to expand," Davis said. In addition, the sites are fairly large (more capital expenses), because to quality as an FQHC, the federal government requires a range of services, including pediatrics, internal medicine, behavioral health, and dentistry. "You can't do that with four exam rooms; we push them to make sure they have adequate space when they open a site."

A new study by the Rutgers Center for State Health Policy suggests that patients who are now getting their medical care at FQHCs and clinics are likely to continue to do so in 2014. The study, which used data from another study funded by the Robert Wood Johnson Foundation, found that in 2009 about 6 percent of the state's nonelderly adult population used community health centers, such as FQHCs, or community or hospital clinics.

Co-authors Kristin Lloyd, and Dorothy Gaboda, found that this population was three times as likely to be poor or near-poor, and reported more health problems overall, than those who sought care from individual doctors or group medical practices. Lloyd said the study found that a significant number who use community health centers and clinics expressed a preference for these healthcare providers. So when health coverage expands in 2014, these patients may seek more services from FQHCs and clinics, she said.

Understandably, Davis shares this view. What concerns her at this point is getting new sites up and running in time to care for the increased patient population.

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