Community Health Centers Face Uncertainty Over Long Term Funding: New Analysis

January 17, 2024

Woman working on walking with a health care worker

WASHINGTON (Jan. 17, 2024) — As  Congress moves forward to advance a stop-gap short-term spending bill that would keep the federal  government running until March, community health centers (CHCs)  face continued uncertainty over sustainable long-term funding.  The latest  data note  authored by  the Geiger Gibson/RCHN Community Foundation Research Collaborative at the George Washington University Milken Institute School of Public Health provides new data on the current financial status of the nation’s community health centers  and the potential consequences of funding delays.

Although health centers rely on a mix of revenue streams to support  operations, federal funds account for 19%  of CHC revenue overall and are critical to sustaining community health centers in resource-poor communities. Federal grants  enable CHCs to support care for uninsured patients, provide services for insured low-income patients who need care that is not covered, and cover costs related to expanding access.

While the proportion of CHC revenue that is accounted for by  federal funding  varies by health center,   federal funding at any level is critical to CHC revenue, margins, and operations. Healthy operating margins are essential  to sustain health center programs and services and allow investment in strengthening services and expanding access.  

The new analysis finds  that the median health center operating margin is just 3.5%, while more than half of all community health centers nationwide -  54% -   operate with margins below 5%. Nationally, 11 million people were served by health centers operating with negative  margins. In several states,  where the majority of health centers  currently report margins below 5%, the core of the health care safety net is in jeopardy.   

The analysis underscores the urgency of  stable, long-term federal community health center funding and the critical need for increased support, according to the authors. 

The data note, Community Health Centers in Financial Jeopardy Without Sufficient Federal Funding is  available now on the Geiger Gibson Program website, along with our full policy research archive.