School based health care:

How it is funded

08/23/2010  |  ADRIENNE AMMERMAN

School based health center, Bonnabel Clinic.

(This is part three of a three-part series on school-based health care.)

School-based health centers (SBHCs) provide primary care, mental health services, and sometimes oral health care to students where they are: in school. In the final part of this three-part series from the National Assembly on School-Based Health Care (NASBHC) we will explore how SBHCs are currently funded, some of the financial challenges they are facing, and how they will benefit from the health care reform legislation.

Sources of Funding for School-Based Health Centers

Research and evaluations have demonstrated that, in addition to being a common sense approach to ensuring that all children and adolescents are healthy and achieving to their fullest potential, school-based health centers (SBHCs) are cost-effective investments of public resources.

“Our studies have proven that we are effective in lowering the cost to Medicaid and any third-party payer system by reducing hospitalization and inappropriate ER use,” says Dr. Veda Johnson, Assistant Professor of Pediatrics at Emory University School of Medicine.  “We’ve demonstrated in a very practical way that SBHCs decrease the cost of transportation because children are right there. SBHCs also reduce the cost of medication and drug use because we don’t prescribe as many medications as in a routine physicians’ office because we can monitor them more closely.”

So how are SBHCs currently funded? For answers, we can look to the most recent National School-Based Health Care Census. This 360-degree view of the role of SBHCs in meeting the needs of underserved children and adolescents presents trend data on demographics, staffing, operations, prevention activities, clinical services, and policies.

Sponsors (organizations that serve as the primary administrative home) of SBHCs are most typically a local health care organization, such as a community health center (28 percent), a hospital (25 percent), or a local health department (15 percent). Other community sponsors include nonprofit organizations, universities, and mental health agencies. Twelve percent of SBHCs are sponsored by a school system. SBHCs often receive additional support from schools and others through in-kind donations of space and services. The majority indicate that they do not have financial responsibility for construction and renovation, maintenance and/or janitorial services, utilities, or rent.

The majority of SBHCs bill public insurance for health center visits, including Medicaid (81 percent), the Children’s Health Insurance Program (68 percent), and Tri-Care (41 percent). Tri-Care is the health care program serving active duty service members, National Guard and Reserve members, retirees, their families, and survivors.  Fifty-nine percent of SBHCs bill private insurance; 38 percent bill students or families directly. A majority of SBHCs (85 percent) also assist children and families with enrollment in public insurance programs. Improving the effectiveness of billing and collection practices and enrolling children and families in public insurance (so there is a payor) has been a major focus of sustainability efforts for SBHCs.

SBHCs also report receiving support from a variety of revenue sources not related to billing, including state government (76 percent), private foundations (50 percent), sponsor organizations (49 percent), and school or school district (46 percent). Thirty-nine percent of SBHCs receive funding from the federal government. 

A closer look at federal and state funding sources indicates support from a diverse base of federal programs. Almost a quarter (23 percent) of SBHCs receive section 330 monies through the Public Health Service Act for community, migrant, and rural health centers; these SBHCS are mainly sponsored by Community Health Centers. State Departments of Public Health are the most common source of state funds – almost half of SBHCs report receiving funds from these state entities– while the departments of human or social services and education fund about 11 percent of programs. In twenty-one states, the state funds or sponsors a grant program specifically dedicated to SBHCs.

Challenges in the States: Budget Cuts and Layoffs

NASBHC’s Census discovered that a growing number of SBHCs see members of the community beyond the students at their school – with just 36 percent of SBHCs reporting they serve only children who attend the school(s) they serve. These patient populations include students from other schools in the community, out-of-school youth, faculty and school personnel, family members of students, and other community members. Clearly, the weak national economy, coupled with loss of employer-sponsored health care, has increased the demand for affordable health care. 

Yet, in the current economic climate, many state programs are struggling to maintain support for the SBHCs they currently fund.  Even as communities across the country require expanded primary care hours, oral health, and expanded mental health services many SBHCs are at risk of cutting services and staff or even closing due to the current economic downturn, insufficient reimbursement for patient services, and slashed local funding.

Layoffs and hiring freezes have also reduced the number of providers on-site to deliver care.  Sue Catchings is CEO of Health Care Centers in Schools in Baton Rouge: “We have an $11 million commitment from the  state that funds 65 clinics. The problem is that we have expenses that continue to escalate at the same time we’ve been in flat budgets. Last year every contract suffered a 4 percent cut, which is a lot when you’re on a shoe string budget. Every time we get cut we have to look at whether we can afford the staff that we have ... and it becomes increasingly difficult to keep people in place.”

Angie Ruiz, Director of Jefferson Parish School-Based Health Centers in Louisiana, is responsible for five SBHCs. One of her centers at Bonnabel High School, just outside New Orleans, recently faced a close call — nearly shutting its doors after the operational funding it received from a private foundation ran out. The school system had a $30 million budget cut and couldn’t pick up the slack. “Fortunately, we had a lot of support from the community,” says Ruiz. “We had had some breakfasts with local business leaders during the year and an advocacy training with our state lobbyists.  When we saw that the center was threatened we got all of our supporters to call our Senator to ask for help — we even got the principal who taught the Senator’s son to call him.”

The intensive grassroots advocacy efforts paid off when the Senator was able to secure a last-minute $75,000 line item for the Bonnabel SBHC in the state budget. Ruiz says, “We’re continuing to pursue local businesses, banks, and other partners and writing grants to make up the budget difference. It’s a constant struggle. Next year we’ll have to go back and fight again after a year’s reprieve.”

Indeed, NASBHC has found that state government agencies with jurisdiction over SBHC programs are not expecting additional financial support in the coming years.  In a survey conducted in late 2009, states were asked about the funding prospects for SBHCs.  Of those 39 states answering the question, only two thought it was even “somewhat likely” that state-level financial support for SBHCs would increase in the next two to three years.

For Ruiz, one potential fix is clear: “If we could get some federal funding to support our other sources we’d have more sustainable funding than relying just on the state, which is in bad shape.”

Champions of school-based health care in Congress agree about the role of the federal government: Congressman Chris Murphy from Connecticut recently said, “We need to tell Washington that this should not be just a responsibility of states and local governments; that the federal government should be stepping up to the plate in a bigger way to support local school-based health centers.”

That is exactly what SBHCs have been working to achieve over the past several years ... and the results are starting to show.

Health Care Reform and School-Based Health Care

NASBHC — with the help of champions in Congress, our state affiliates and associations, and advocates from across the country – has made significant progress in advancing SBHCs as a vital component of health care reform. The Patient Protection and Affordable Care Act (P.L.111-148), signed into law by President Obama on March 23, 2010, includes a federal authorization for SBHCs in Section 4101(b) – a huge victory for vulnerable children and adolescents and for SBHCs.

A second provision that mandates $200 million over four years to SBHCs is restricted for capital projects (Sec. 4101(a)).  This provision was intended to support struggling SBHCs and to deliver services directly to vulnerable kids — but ended up being limited to capital improvements and equipment purchases, with expenditures for health care services and personnel specifically excluded.  The capital funds could allow some SBHCs to be built or expanded, but clinics need a sustainable source of operations funding in order to provide services for the children and adolescents who depend on them for care.

Without support for the operational costs needed to support a clinic, the effectiveness of the capital money already allocated to SBHCs in the Affordable Care Act under section 4101(a) will be greatly limited. The original House-passed bill identified a $50 million appropriation for the newly authorized school-based health center program. NASBHC is asking that the $50 million identified in the original House-passed bill be appropriated in 2010 to enable SBHCs to keep their doors open, and to give critical resources to communities that desire to open health centers at their schools.

For real-life examples of the critical importance of operational funding one need only look as far as North Carolina. Last year, the state lost funding for two clinics ($124,000, or about 10 percent of their $1.5 million state funding). Five other clinics lost funding to newer centers in the state’s concurrent granting process, as there was just not enough to award to all that deserved.  They were able to use bridge funding from a local foundation to keep those clinics from closing for one year, but that funding will end this year.

Connie Parker, Executive Director of the North Carolina School Community Health Alliance, has been telling SBHCs in her state to hang in there as best they can until federal funding comes through — but the fact that the emergency appropriations are for capital funds only will not help the clinics that are struggling to stay open.

“I’m afraid we’re going to lose at least two centers,” says Parker. “Another clinic has had to cut their hours in half. These communities are in poor counties with very little access to health care for this age group ... it’s definitely going to impact the health of these kids in the long run because they have no other place to go. We’re trying to work as hard as we can in all the cracks and crevices of funding to try to help these folks stay open.”

The Future of School-Based Health Centers

Despite all of the challenges SBHCs face, the model appears to be here to stay. According to NASBHC’s 2007-08 Census, seventy-two percent of the nation’s SBHCs are five years or older, up from 41 percent in 1998. Also, 287 SBHCs opened in the past four years. These numbers attest to a continued community support of and demand for the model.

Parker reflects the optimism of many of the people in her state with whom she communicates: “I’m working with three communities that are at various stages of trying to get school-based health centers off the ground. The nice thing about it for me is that it’s the school systems that are searching for funding — schools are recognizing that healthy students do better academically, and that’s a big turn-around in the past 15 years that I’ve been watching the trends.”

Policymakers are also increasingly recognizing the value in supporting SBHCs.  As Congressman Sarbanes (D-MD) told a crowd of hundreds of advocates at the National School-Based Health Care Advocacy Day rally on Capitol Hill this summer, “There has to be a school-based health center in every school ... This is an investment. We are going to save so many more multiples of $50 million over the long term if we invest those dollars today.”

If you want to support SBHCs’ efforts to remain sustainable through federal funding, please donate to NASBHC at

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