CHCF Contributes $10 Million to Loan Program for California Community Health Centers

Financing will help keep safety net intact during state budget crisis

With a state budget crisis threatening the ability of community health centers to deliver needed services, the California HealthCare Foundation (CHCF) will provide $10 million to a low-interest loan pool designed to ensure clinics are able to provide uninterrupted care.

The budget stalemate in Sacramento has ignited a financial emergency 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 (CPCA), the statewide representative of over 700 community clinics and health centers, found that 6 in 10 clinics had less than a 30-day cash reserve on hand.

With Medi-Cal reimbursement accounting for up to 50% of community health center revenue — or approximately $10 million each week statewide — further delay in reaching a budget agreement will make it increasingly difficult for many community clinics to meet payroll and overhead expenses. As a result, some will be forced to reduce patient services, reduce hours of operation, or shut down altogether.

“In the words of Yogi Berra, ‘it’s déjà 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 health care, 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 proven 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 or 90 days 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. Visit the NCB Web site for more information.

CHCF participation in the loan fund is part of its broader effort to support the state’s crucial health care safety-net institutions, which includes increasing efficiency through the widespread implementation of electronic medical records, quality improvement activities, and process redesign.

Contact Information:
Eric Antebi
Director of Communications

About the California Health Care Foundation

The California Health Care Foundation is dedicated to advancing meaningful, measurable improvements in the way the health care delivery system provides care to the people of California, particularly those with low incomes and those whose needs are not well served by the status quo. We work to ensure that people have access to the care they need, when they need it, at a price they can afford.