Community Health Centers Create Jobs

Washington, D.C.–(ENEWSPF)–February 17, 2011. 

Click here to see how many of the nearly 300,000 jobs that would be lost by cutting health care funds are in your state.

It’s budget time in Washington, which after last year’s congressional elections means everyone is focusing on reducing government spending. It’s easy to boast about cutting inflated government programs but quite a different story when you take a good look behind the rhetoric. Take the recent cuts proposed to our nation’s community health centers. Policymakers need to remember they promised to do more than cut government spending—they also promised to create good jobs. Repeal of the Affordable Care Act and the new funding it provides to community health centers will eliminate nearly 300,000 jobs in 2015. We estimate that when the proposed budget cuts in funding for the rest of the 2011 fiscal year are combined with health center funds lost through repeal of the Affordable Care Act, more than 178,000 jobs would be lost this year alone.

With a 45-year history of providing health care in federally designated underserved communities for everyone regardless of their ability to pay, community health centers have been lauded by Republicans and Democrats alike for the generative role they play in their communities. Not only do they provide a wide array of health services for 20 million Americans but by their very existence in the neediest pockets of our country they also provide enhanced economic development and job creation for the communities they serve.

Community health centers create jobs—and not just for health professionals and support staff. The ripple effect of their economic influence extends well beyond the clinic walls into their surrounding neighborhoods where local businesses sell products and provide services to the health centers and rely on the revenue they generate.

In any discussion about expanding health care, community health centers are featured prominently. In fact, the expansion of health centers was the main element of President George W. Bush’s health agenda. Likewise, the Affordable Care Act allocated additional funding to health centers so they could ramp up to be prepared to provide care for many of the additional 32 million Americans that will have health insurance coverage in 2014.

A previous CAP analysis found this additional funding over the next 5 years would help these centers create nearly 300,000 additional jobs providing health and related services at the clinics and more broadly in the local business communities. Any proposals to repeal the health reform law would also of course eliminate these community-based jobs.

The fiscal year 2011 continuing resolution currently being debated in the House of Representatives would slash the health center funding to levels not seen for over a decade. The proposed legislation would cut $1 billion from the FY 2010 baseline funding ($2.1 billion) for community health centers. In the absence of the extra investment mandated under the Affordable Care Act—but that the House just voted to eliminate—this would reduce funding to the 2000-01 level. If existing health centers have to cut their budgets nearly in half, they would have no choice but to institute immediate layoffs. Our analysis of this cut found this would result in the loss of more than 178,000 jobs.

What kind of jobs? First, and most obviously, these health centers directly employ people in their communities, including doctors, nurses, other health professionals, and key entry-level jobs. The centers provide training on-site and other community-based opportunities. And they purchase goods and services from local businesses and expand and build new locations. All of these activities create additional jobs.

Of course, the new and expanded community health centers supported by enhanced funding from the Affordable Care Act as well as the businesses that have ramped up to serve these centers also must hire new employees to fill the increasing demand. Every dollar spent and every job created by health centers has a direct impact on their local economies.

Although the numbers in this map are depicted at the state level, the funding of health centers goes to the nation’s most distressed communities, which are mostly rural and urban areas. For a full discussion of community health centers, the people and communities they serve, and the economic activity they create, see “The Importance of Community Health Centers: Engines of Economic Activity and Job Creation.”

Notes : All “job” numbers represent one Full Time Equivalent or one full-time employee. Total FTEs denote total workforce generated by health centers resulting from direct, indirect, and induced economic impacts. For the definition of FTE and additional explanation on methodology, see the appendix in CAP’s memo, “The Importance of Community Health Centers: Engines of Economic Activity and Job Creation” (pdf).

Source: The formula for this analysis is based on revenue trends from the 2009 Uniform Data System, Bureau of Primary Health Care, HRSA, DHHS, and new health center funding as described in the Affordable Care Act. Analysis of estimated FTE loss as a result of ACA repeal by National Association of Community Health Centers and Capital Link. Nevada health center data provided directly from Nevada health centers. Prepared by Capital Link with MIG, Inc. IMPLAN Software Version 3.0, 2008 structural matrices, and 2008 state-specific multipliers. Estimated FTE loss from 2011 CE funding is CAP analysis.