Financing School-Based Health Centers:
Current methods and alternate approaches in Los Angeles Unified School District
By
Kimberly Uyeda, M.D.
Paper prepared for LAUSD Student Health and Human Services Division,
Office of Health Partnerships
September 15, 2000 (Draft II)
Financing School-Based Health Centers:
Current methods and alternate approaches in Los Angeles Unified School District
Executive Summary
School-based health clinics (SBHC) have emerged as a method of health delivery that offers accessible and affordable care to those in need. Los Angeles Unified School District houses many SBHCs, growing out of efforts to address the increasing physical and mental health risks faced by children and youth today. Funding for these clinics comes from a variety of sources and attests to the individual arrangements fashioned by each school, provider and community. This study found that the majority of clinics receive significant in-kind support from Providers (hospitals, community clinics, County departments). Some SBHCs benefit from the direct support of the District and some rely heavily of external grants. Although most clinics are capable of billing, third party payment through insurers such as Medi-Cal accounts for a small fraction of the operating budget in most SBHCs. This heavy reliance on in-kind support makes many clinic administrators skeptical about the ability of sponsors to continue to fund clinics in a cost-effective manner. They are in turn looking for different approaches to funding clinics in a more sustainable fashion.
SBHCs in other areas of the country have traditionally enjoyed private grant and state government support. Many states have created mechanisms to directly fund SBHCs using general fund or Title V (MCH) dollars. Furthermore, state governments have intervened to varying degrees making it relatively easy for some clinics to finance operations using Medicaid reimbursements. However, the advent of Medicaid managed care has ushered in an era of increased restrictions on allowable billing and provision of care. As SBHCs across the nation are finding less direct state and grant assistance, they are forced to look to patient care revenue (which includes managed care arrangements) for support.
With the current funding situation of SBHCs changing and evolving, there are several approaches to clinic financing that should be explored in Los Angeles (see Table 3 on page 13 for a listing and explanation of approaches).
1) Current operations could should be maximized in efficiency. This could include redistribution of staff to areas of highest need and co-locating providers on campus to increase ease of accessing these services. Efficiency also refers to redeployment of resources (monetary or personnel) into more preventative, lower-cost programs. A strategic audit on current community need and existing capacity would be a prerequisite in guiding any efforts to redistribute or redeploy staff or resources.
2) Public and private revenue sources should be maximized. The District is already able to draw down matching funds for services rendered under the LEA Billing Option and Medi-Cal Administrative Activities. Increased utilization of these methods and other leveraging tools need further exploration. There are also certain block grants (ie. Title V, MCH) and discretionary grants (ie. Healthy Start) which have potential to further support the efforts of SBHCs. The key is to recognize program eligibility for these funds or consider natural partnerships with organizations to better meet the service and eligibility requirements that qualify for funding.
3) Increased flexibility of categorical funding would allow easier financing of comprehensive programs. Methods of increasing flexibility range from local coordination of funds at a program level to negotiating “master contracts” with state agencies to essentially pool funds from multiple funding streams. Flexible financing mechanisms work most effectively in supporting integrated services that require funding from multiple sources. Flexibility may not represent more absolute money, but more money that is available for needed services as determined by the local community.
4) Public, private and community partnerships are critical to financial sustainability. Partnerships allow greater access to some funding mechanisms, such as the block and discretionary grants. Perhaps more importantly in the current economic environment, are the partnerships that increase the ability to access certain billing mechanisms (PPP, FQHC[*] and managed care organizations). Finally, partnerships should always revolve around mutual benefit and bring organizations together that can offer not only monetary resources, but leadership, public notice, technical assistance and information exchange.
There are no standard solutions for the financial challenges faced by the various SBHCs in the LAUSD. Each clinic has its own arrangements with Providers, the District and private funding agencies. However, the District does have an overall responsibility to optimize the learning opportunities of its students, which in many cases entails sponsoring health and human services. The current financing mechanisms could be improved and built upon to support a more financially stable SBHC system within the District. However, there may be greater long-term gains by pursuing more far-reaching and radical methodological changes in financing. New and strategic partnerships, working toward service integration and the flexible funding mechanisms that are required to support such efforts should be the areas of greatest focus. Schools represent an ideal platform for expanded service delivery, beyond basic health care, to students and surrounding communities. The method by which the system is financed will ultimately determine which services are provided, how needs are met, and the organization of the entire delivery system. LAUSD and its SBHC network have the knowledge and experience to foster leadership at many levels, without which the ideas of local partnering and integration cannot succeed. This is a critical time for SBHCs, one where financial decisions will determine future clinic viability and subsequently overall student and community well being
TABLE OF CONTENTS
I. Introduction ……………………………………………………………… 6
A. Los Angeles and LAUSD……………………………………………… 6
B. School-Based Health Centers………………………………………… 6
II. State of SBHC Financing: local and national models…………………….. 7
A. SBHCs in Los Angeles………………………………………………… 7
Provider in-kind support
LAUSD support
External grants
Third-party billing
B. SBHCs across the nation……………………………………………… 10
Boston, Massachusetts
New York State
Dallas, Texas
III. Approaches to financing SBHCs………………………………………… 12
A. Maximize efficiency of current operations…………………………… 14
Redistribution and co-location of staff
Redeployment of resources
Strategic audit
Recommendations
B. Maximize public and private revenues………………………………… 16
Leverage and refinance (HSP, LEA Billing Option, block grants)
Administrative claiming (MAA)
Maximize subsidies and pursuit of discretionary grants
Recommendations
C. Increase flexibility of categorical funds………………………………. 20
Pooling
Coordination
Decategorization
Recommendations
D. Public, private and community partnerships………………………… 23
Partner to access public and private grants
Partner to effectively access billing mechanisms (PPP, FQHC, MCOs)
Partner to provide mutual benefits
Partner to provide increased community and political support
Recommendations
IV. Discussion………………………………………………………………. 27
V. Conclusion………………………………………………………………… 30
Appendix 1: School-Based Health Clinics’ Financing Puzzle…………… 31
Appendix 2: Grant programs that may be used in SBHC funding……… 32
References………………………………………………………………… 33
I. INTRODUCTION
A. Los Angeles and LAUSD
The Los Angeles Unified School District (LAUSD or the District) is one of the largest school districts in the nation. Situated in Los Angeles County, the District is home to some of the most underserved areas in the state. County data indicates that over 850,000 children live in families that earn incomes less than the Federal Poverty Level (FPL). One in four children in the County are uninsured and certain populations have even higher rates (33% of Latino children have no health coverage).[1] Non-insured status has been repeatedly documented as a barrier to receiving preventative health services or timely medical care.[2]
Over 700,000 students attend the District’s 790 K-12th grade schools.[3] The student population reflects the health and social trends seen in the County. LAUSD data indicate that many schools or complexes have alarmingly high poverty and uninsurance rates. Health indicators in 1997 showed a district with 3,562 teenagers with sexually transmitted diseases, 18,619 youth mental health cases, and high rates of unmet need.[4] On average, 10% of children in the District are not getting needed medical care based on their parents’ report.[5] Similarly, academic performance indicators have also been discouraging, with LAUSD students consistently scoring below the national and state average on standardized tests.
The lack of access to health services and the generally poor student health and academic status has lead to changes on many fronts. The District has worked diligently at raising the rate of Medi-Cal[*] insured students from 30% of the student body to figures approximating 38%.[6] Educational reform efforts have resulted in encouraging trends in standardized test scores. Although still below national averages, the Stanford 9 scores of LAUSD students have shown relative improvements in all subjects and across all grade levels over the last two years.[7] This academic year the District has embarked upon a plan to decentralize operations and place more decision making power into eleven smaller sub-districts. Increasing emphasis has been placed on bringing more services to students and their families either at school or linked to school though the community. Administrators and policy makers realize the need for non-academic supports in order to achieve educational goals. However, many are dissuaded by the financial and logistical hurdles that must be overcome in order to offer comprehensive school-based services. School health centers have emerged as just one of the possible components of the integrated service network needed to foster healthy students that are ready to learn.
B. School-Based Health Centers
School-based health services are not new entities in the context of educational history. From the early 20th century Progressive Era reformist to the activists of the 1960’s “War on Poverty,” schools have been a venue for health and social services.[8] What might be called the modern era of school-based services began in the 1970’s with comprehensive programs appearing on school campuses in Dallas, Texas and St. Paul, Minnesota. These programs sought to address the shortcomings of our health and educational systems’ ability to address the “new morbidities” faced by teens, namely violence, unsafe sex, and drugs and alcohol.[9] In addition, secondary schools offered a unique venue for services in terms of confidentiality, convenience and integration with educational curriculum for this hard to reach adolescent age group. In the late 70’s and early 80’s, the Robert Wood Johnson Foundation (RWJF) began to support several innovative sites through its School Health Services Program, Community Care Funding Partners Program, and School-Based Adolescent Health Care Program.[10] Three of the RWJF grantees were housed in LAUSD high schools.
Over the last decade there has been a relative explosion in school-based health centers (SBHC), many of which include allied health and social services on campuses. There are reportedly over 1100 SBHCs in the United States.10 Los Angeles has dozens, with LAUSD alone housing 26 functioning clinics. Three of the original RWJF sponsored clinics (San Fernando High School, Jordan High School and Los Angeles High School) now have over 15 years of service experience. But the future of SBHCs is not clear in a quickly changing and tightly managed medical market. This paper will first look at the mechanisms used to finance clinics in Los Angeles, as well as in other areas of this country. The second part of the paper will look at various finance strategies and realistic approaches to reform that can be used to optimize the fiscal outlook of the SBHCs. It is hoped that through review and analysis a sustainable financial plan can be formulated that will allow SBHCs in the District to continue to provide needed services for children, families and their communities.
II. STATE OF SBHC FUNDING: LOCAL AND NATIONAL MODELS
A. SBHCs in Los Angeles
There are multiple methods of financing school clinics in LAUSD. The challenge is to characterize the techniques that are currently in place in order to make any recommendations for future reform. Interviews were conducted with 21 clinic coordinators and providers to represent all 26 SBHCs in the District. The interviews were structured to determine the extent of funding that has been derived from different sources. The participants had opportunities to express their opinions and offer suggestions for methods of future clinic financing. The results of the interviews are summarized in Table 1. The majority of funding and support for SBHCs came from four sources: Provider agency in-kind support, District (LAUSD) support, external grants and third party billing revenue.
1. Provider in-kind support. School based clinics in Los Angeles have grown out of relatively independent arrangements between schools and health agencies (Providers). “Providers” represent the sponsoring medical agency for the SBHC. In Los Angeles these have been not-for-profit hospitals, medical corporations, community clinics and in some cases the County Department of Health Services. Many of the clinics rely heavily on the support of the Provider. Twelve out of 21[*] clinics reported that Provider in-kind support accounted for “half” to the “majority” of the clinic operating budget. Most of the in-kind service is realized through staff time (physicians, nurse practitioners, medical assistants and clerical staff). Providers offer follow-up services, laboratory and radiographic evaluation and they will often supply the clinic with medical equipment and other medical supplies.
Table 1: Summary of LAUSD School-Based Health Clinic Financing Sources
School/Provider / Provider In-Kind / LAUSD / External Grants / 3rd Party billingBell HS/
CHFELA[1] / Majority- staff and services / Some—
LEA grant[2] / CCG
(others in past) / None—
Carson HS/
S. Bay Free Clinic / Majority- staff and services / Some— / None— / None—
Columbus MS/
El Proyecto del Barrio / 1/3-staff and services (2d/wk) / Majority—
Staff
LEA grant / Kaiser / CHDP—thru LAUSD
(o/w None)
Lawrence MS/
El Proyecto / Some- staff and services (8 hrs/wk) / Some—
Coord’s salary / Majority- / None—
Elizabeth LC/
St. Francis MC / Half- / Some / None-
(Kellogg in past) / Half- CHDP Medi-Cal
Foshay LC/
CA Hospital / Majority- staff and services / None / One (1/2 budget) / Medi-Cal (15%)
Gage MS/
CHFELA / Majority- staff and services / None / HS grant +3 others (help peripherally) / Some-- thru provider (CHFELA)
Gardena HS/
Harbor UCLA / Majority- staff and services / Some—
LEA grant / HS grant[3]
Teen Preg grant / None
Hollywood HS/
CHLA[4] / Some- staff and services / Some- staff,
LAUSD Fund / Majority- Hoag, Eisner, Queenscare / CHDP, Dept MH (Medi-Cal), Preg
Manual Arts HS/
CHLA / Some- staff and services / Some- staff,
LAUSD Fund / Majority- Hoag, Eisner, Queenscare / CHDP, Dept MH (Medi-Cal), Preg
Los Angeles HS/
CHLA / Some- staff and services / Some- staff,
LAUSD Fund / Majority- Preg, Queenscare, (HS) / CHDP, Dept MH (Medi-Cal), = 5%
Holmes Ave/
LAUSD Nursing / None- precepted by County DHS / Majority (NP salary), LEA grant / None / CHDP
Murchison Street/
LAUSD Nursing / None- precepted by County DHS / Majority (NP salary), LEA grant / None / CHDP
Jordan HS/
Watts Health Fnd / Majority- staff and services / Some-
LAUSD Fund / Some
(RWJF in past) / CHDP/Medi-Cal (18%)
Kennedy HS/
LA DHS[5] / Majority- staff and services / Some-
LEA grant / None / Some
Vaughn Elem/
LA DHS / Some- staff and services / Majority- (charter school funds) / Some- Uni-health, Kaiser, etc. / None
Melrose/Vine/WH
Rosewood/CSMC[6] / Small amount supplies / ? / Majority- / None
Roosevelt HS/
White Memorial /
Half
/Half
LAUSD Fund / (Half- Queenscare thru provider) / CHDP/Medi-CalSecond Street/
White Memorial / Majority- staff and services / None / None / Very little
San Fernando HS/
Northeast Valley /
Half
/Half
LAUSD Fund / None now(RWJF in past) / CHDP/Medi-Cal (up to 30%)
Wilson HS/
ELA Health Task Force /
Half
/ ? /Half
/ CHDP/Medi-Cal(State contracts make billing up to 50%)
Totals: / 12/21
“half”- “majority” / 5/21
“half”- “majority” / 5/21
“majority” / 6/21
“none”
There are many potential motivations behind these in-kind services. First, all of the Provider hospitals, corporations and clinics have certain commitments to their communities. They have an interest in serving those with unmet medical need and have chosen schools as a method of reaching this population. Their non-profit status requires a certain amount of demonstrated “community benefit.” Second, some of the Providers are hospitals that support training programs for physicians, nurses, assistants and social workers. SBHCs offer a unique training opportunity to work directly in a community setting. Third, Providers may view SBHCs as an opportunity for early interventions and screenings in a convenient location for patients (students), as well as a method of fulfilling performance indicators such as HEDIS[*] that measure activities such as immunization rates and well-child care to report to funding agencies. A final motivation for Providers may be the potential for outreach and enrollment at the school-based site. SBHCs are relatively high profile clinics within the community that could act as an entry point for enrollment to health plans and provider agencies. There is no current method for tracking enrollment trends through SBHCs, but the competitive marketplace for patients in Los Angeles County makes this a significant potential incentive for Provider participation.