Economic Engines

Hawaii’s community health centers provide more than medical care to local communities

October, 2003

By the time Kaye Dee Lunsford visited the Waimanalo Health Center in 1998, it had been years since she’d seen a doctor. She couldn’t even recall the last time she’d had medical insurance.

Then again, that really hadn’t mattered to her until 1998. That’s when the bartender-slash-housecleaner noticed a lump below her abdomen.

Health center staff helped Lunsford fill out an emergency application for QUEST, the state-run program that provides managed-care health plans for low-income residents.

“It turned out I had a fibroid cyst, which is not unusual, except mine had grown to the size of a grapefruit,” Lunsford says. “It was sitting on my bladder, and I had to have a hysterectomy within a month. I don’t know what I would’ve done if I didn’t come here.”

Today, Lunsford comes to Waimanalo Health Center regularly – as a patient and, since July, as one of its employees. She began working there a few weeks after earning her certification as a medical assistant.

Community health centers are best known for providing primary care in Hawaii’s underserved areas. These are neighborhoods, usually rural, where many people aren’t likely to seek medical services, because they’re uninsured, low income, non-English-speaking and so on. Health centers charge for services on a sliding scale, even accepting patients unable to pay.

While most residents acknowledge these centers as Hawaii’s health care “safety net,” many don’t recognize their economic contributions in the state, especially in their respective communities. For example, Waianae Coast Comprehensive, the state’s oldest and largest health center, employs more than 300 people – 81 percent of whom live in the area. That makes the center Waianae’s largest employer, by far.

“The whole idea behind health centers is not to develop a poor people’s clinic,” says Richard Bettini, director of Waianae Coast Comprehensive. “It’s about empowering the low-income community to deal with their health statistics, not just by offering them care regardless of their ability to pay, but by training them and giving them jobs.

Today, Hawaii’s 10 community health centers (three new centers – one each in Molokai, Kona and Oahu’s North Shore – are expected to open by next year) employ more than 800 people. This sounds like a small number, but these centers make a substantial difference in the communities they serve.

“They are economic engines, because they’re in communities that don’t have a lot of economic activity going for them,” says Beth Giesting, executive director of the Hawaii Primary Care Association, the umbrella organization for nine of the 10 centers. “They do business with people from the community. They offer jobs in the area that wouldn’t otherwise be available. And they’re extra assurance for people considering starting a business or moving there.”

The benefits of these health centers transcend the boundaries of their neighborhoods. These providers offer comprehensive primary care – outpatient services such as family medicine, pediatrics, obstetrics and gynecology and case management. Some also offer dental care, behavioral health services, geriatric programs, cultural healing and substance-abuse counseling.

All centers emphasize preventive care for their patients. That’s where these clinics have proven themselves as money-savers for Hawaii’s health care system, Giesting says. When centers diagnose and treat patients for diseases early on, they can avoid costly emergency-room visits and hospitalizations.

In fact, Medicaid patients served by community health centers are 22 percent less likely to be hospitalized for preventable conditions, according to a 2001 study conducted by the Johns Hopkins School of Hygiene and Public Health. The nation’s centers save the Medicaid program about 30 percent in annual spending, because they reduce the numbers of specialty-care referrals, hospitalizations and emergency-room visits.

“These centers need to be recognized as an important part of the health care system of the state,” says Dr. Virginia Pressler, vice president of women’s health services at Hawaii Pacific Health. “Without them, we’d have a huge gap in health care for a large part of the population, who would end up in emergency room. That would mean poorer care for patients and more expensive costs for the state and the health-care system.”

Serving thousands of Hawaii patients – many of whom can’t afford to pay – doesn’t come cheaply. Each of the 10 health centers is an individual nonprofit contracted by the state and charged with raising its own funds. In total, they annually bring in more than $50 million in revenues: 54 percent from patient fees, 19 percent from state contracts and grants, 15 percent from federal grants and 4 percent from private foundations and donations.

While that sounds like a nice chunk of change, it barely covers the services each center provides.

Each year, Hawaii’s health centers face a number of financial challenges, which are exacerbated by an already strained state budget:

  • In 2002, the state’s 10 health centers saw more than 73,000 patients. About 82 percent live below the poverty level. About 37 percent, or 27,000 of them, had no medical insurance. Some centers, such as Kauai Community Health Center, face grimmer statistics. More than 80 percent of its patients are uninsured.
  • A significant amount of patient fees come from the state-run MedQUEST program. While the state is obligated to reimburse the centers for the difference between the cost of services rendered and the amount MedQUEST pays, reconciliation is complicated. The state owes the centers several million dollars in back payment, Giesting says. That’s a big deal to these providers, who operate on slim margins.
  • Each year, the state Department of Health’s budget includes just $2.1 million for the health centers. The centers must lobby the state Legislature each session for additional funding.
  • Economic uncertainty threatens state grants to the health centers, and most centers lack resources to boost their private fund-raising efforts.
  • Like all health care providers, community health centers deal with rising insurance costs.

[Waianae Coast Comprehensive] has seen a 50 percent increase in medical insurance for employees, and our workers’ comp premium increased $200,000 – those two premiums exceed our total federal grant,” says Bettini. “It’s a constant challenge how we survive.”

Hawaii’s community health centers have taken several steps to keep themselves in the in the black. That includes requiring uninsured patients to apply for Medicaid and QUEST programs. Centers have also beefed up their marketing to potential patients who already have insurance.

“People think this is for low-income people only, but the centers provide quality services and up-to-date equipment,” says state Rep. Dennis Arakaki, chairman of the Health House Committee. “Even someone like me – middle income with insurance – I get my dental services at Kokua Kalihi Valley health center. I don’t think most people are aware of these centers and how much they actually do for their communities and the state.”

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