With California’s budget over $26 billion short this fiscal year, causing the state to issue IOUs instead of some payments to California businesses and organizations, business owners are not the only ones feeling the financial pinch.
The budget deficit also poses a serious threat to the continued operation of many of the state’s community health centers and clinics, according to the California HealthCare Foundation.
To address the health clinic crisis, the California HealthCare Foundation announced last week that it will grant the Emergency Working Capital Loan Fund $10 million in its effort to keep California’s safety-net clinics up and running.
The fund will try to counterbalance the recent shortage of funds from California’s low-income insurance program, Medi-Cal, whose reserve funding is on the verge of running dry due to the state’s budget difficulties.
With no Medi-Cal assistance, almost eight in 10 community clinics and health centers would require an emergency loan to continue operating – some would be forced to reduce patient services or hours, or close their doors entirely, according to a recent survey by the California Primary Care Association.
And with no budget agreement in sight, many health centers are wondering how long they can stay operating without the 50 percent reimbursement from Medi-Cal – payments which add up to approximately $10 million each week throughout California.
With donations from the California HealthCare Foundation – as well as Catholic Healthcare West, Sutter Health, the Nonprofit Finance Fund, NCB Capital Impact, Mercy Partnership, and the CPCA Loan Fund – California health clinics can receive up to $1.5 million in loans, with a 3.6 percent interest rate, to support operating costs.
California’s healthcare and financial difficulties became even more grave this week, with the announcement that the 33 percent increase in the state’s obesity rate has caused health costs to double over the past six years, reaching an estimated $41 billion each year, said the California Center for Public Health Advocacy.
