WASHINGTON and NEW YORK— Investment in community-based health centers could save states millions of dollars a year, according to a new study “Community Health Centers in Indiana: State Investments and Returns” conducted by faculty and staff at The George Washington University School of Public Health and Health Services.

“Health centers in Indiana play a crucial role in providing cost effective care to a high need population, resulting in overall savings to the State’s health care system.” said Julio Bellber, president and CEO of the RCHN Community Health Foundation. “The experience in Indiana highlights the importance of health centers to health reform.” Added Sara Rosenbaum, Hirsh Professor and Chair of the Department of Health Policy at GW, “Applied nationally, these findings suggest an ability on the part of health centers to ‘bend the curve,’ in an appropriate way, particularly for vulnerable populations.”

Though the report focused on community health centers in Indiana, the results have implications for all states. Like many other states, Indiana is currently struggling with exponentially growing health care costs and a shrinking state budget. From 1984 – 2004, the state consistently spent a larger share of its gross state product on personal health care than the average U.S. state, and it is predicted that over the next 35 years, health care spending will absorb half of the state’s budget, endangering spending on education and public safety. Rising health care costs have also contributed to a nine percent reduction of employer-based coverage in Indiana between 2001 and 2005, which has resulted in growing rolls of publicly insured and uninsured residents.

Key findings include:

• For every dollar spent on patient care at an Indiana community health center, (I-CHC) $1.90 is saved in overall health care spending when compared with other primary care settings.

• Indiana CHCs effectively target a population that is economically stressed and financially and medically at risk. Approximately nine in 10 CHC patients have incomes below 200 percent of the federal poverty level (FPL).

• Health care services provided at Indiana CHCs are less costly than those provided at other outpatient provider settings, with an annual per-patient cost of $1,529 at CHCs versus $2,924 in other settings — resulting in a savings of $1,395 per patient.

• Lower medical costs resulted in savings of $473 million for Indiana’s health care system realized through the lower cost of health care in ambulatory health center settings as well as reduced spending on hospital emergency room utilization and a lower rate of inpatient hospital admission.

• In addition to direct savings to the health care system, each dollar spent by the state on I-CHCs is associated with between $6 and $17 of value, in terms of revenues generated from all sources for the delivery of services at I-CHCs.

The study findings underscore the importance of investments in health centers and the need to develop sustainable revenue mechanisms at the federal, state, and local levels to enhance the ability of health centers to meet these growing needs.

The report is available here.

About the RCHN Community Health Foundation
The RCHN Community Health Foundation (RCHN CHF) is a New York-based not-for-profit operating foundation dedicated to supporting and benefiting community health centers (CHCs) in New York state and nationally. The Foundation develops and supports programmatic and business initiatives related to community health center access, pharmacy and health information technology through strategic investment, research, outreach, education, and coalition building. For more information about RCHN CHF, contact Chief Operating Officer / EVP Feygele Jacobs at (212) 246-1122, ext. 712, or fjacobs@rchnfoundation.org.

About The George Washington University Medical Center
The George Washington University Medical Center is an internationally recognized interdisciplinary academic health center that has consistently provided high-quality medical care in the Washington, DC, metropolitan area for 176 years. The Medical Center comprises the School of Medicine and Health Sciences, the 11th oldest medical school in the country; the School of Public Health and Health Services, the only such school in the nation’s capital; GW Hospital, jointly owned and operated by a partnership between The George Washington University and Universal Health Services, Inc.; and the GW Medical Faculty Associates, an independent faculty practice plan. For more information on GWUMC, visit www.gwumc.edu.