Healthcare Business News

Sequester expected to sock health centers

By Rich Daly
Posted: March 4, 2013 - 3:00 pm ET

Community health centers will serve about 900,000 fewer patients in 2013 because of sequester-related funding cuts, according to a report.

Researchers at the School of Public Health and Health Services at George Washington University (PDF) projected the service delivery impacts on the federally funded health centers from the sequester, which four days ago began cutting $85 billion in federal spending this year.

Those 1,200 centers, which operate 8,500 locations, serve primarily low-income residents and will lose about $120 million in federal funds this year, according to the researchers.

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“Given who health centers serve and where they are located, it is not surprising that our findings reveal that the funding reductions will hit the most vulnerable patients the hardest,” Peter Shin, an associate professor of health policy at George Washington and lead author of the report, said in a news release.

Because the Obama administration has provided little detail on the implementation of the sequester, the researchers' report was an “initial assessment” of its impacts on the health centers.

The scope of the patient impact was magnified by researchers' conclusion that the $120 million in grant funding losses will result in an additional loss of $230 million in third-party insurance funding.

Health centers provide care to more than 20 million people annually and the expansion of the program by the Patient Protection and Affordable Care Act was expected to “dramatically” increase their patient capacity, Julio Bellber, president and CEO of the RCHN Community Health Foundation, said in the release.

Separately, an international consulting firm warned that the increased illness expected from sequester-related cuts in funding for the Centers for Disease Control and Prevention will increase federal healthcare spending.

The report from GlobalData's healthcare researchers examined the expected $450 million, or about 8%, cut that the sequester was expected to take from the CDC's budget in the current fiscal year and concluded the cuts will hamper the agency's ability to prevent infectious diseases.

“The resulting increase in the incidence of preventable food-borne and infectious-disease illnesses would increase the demand for therapeutics, such as antiviral and antimicrobial drugs,” Brad Tebbets, an analyst for GlobalData, said in a news release. “This market growth would likely cost taxpayers more in the long term, both fiscally and physically, than any of the perceived short-term savings that would be realized as part of the sequestration.”

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