Category Archives: Community Health Care

Investing in the Health of Residents and a Community

David Flentge, President and CEO, Community Health Care

David Flentge, President and CEO, Community Health Care

Community Health Care (CHC)  is a Federally Qualified Health Center in Pierce County, Washington. It has provided health services to the underserved for over 44 years and is currently a health care home for 31,000 patients annually through five medical and two dental clinics. Of those, 59% have incomes below poverty, 81% are low income, 19% are uninsured, 56% represent racial and ethnic minority groups, and 37% are children.

Tacoma’s Hilltop community, where CHC’s clinic is located, is the most densely populated low income area of the county and the highest risk area in the state for infants and children. It was once a premier retail and shopping area of the city but had fallen into disrepair. Most retail had disappeared, and its future seemed uncertain. For some years, CHC wanted to expand or replace its small and aging clinic in the area. The issue became more pressing with the enactment of the Affordable Care Act in 2010, when CHC projected that its client base could more than double in the next few years. CHC received a grant from the federal government for $12 million to undertake the construction of a more adequate facility to respond to this need in the Hilltop district. CHC also believed that the prospect of a major outpatient health care facility being built in the area would bolster the area’s prospects for economic redevelopment.

It became apparent that CHC’s federal grant would only be the start of the total financing needed to build a facility that could adequately respond to the need in this area. In addition, the timing of CHC’s grant coincided with a major downturn in the economy. This made capital campaigns difficult and made it doubtful that CHC could raise the $26.68 million that the final design of such a new clinic required.

CHC learned about New Markets Tax Credit (NMTC) projects in the immediate area and contacted prior participants. CHC launched into the task of securing NMTC financing and partnered with Low Income Investment Fund, National Development Council and US Bank.  All three groups met onsite and worked together to complete the deal which included $27.5 million in NMTCs, $7 million in equity investments and additional bridge financing.

The project is now under construction and scheduled to open in October 2013. It will provide medical and dental clinics, a pharmacy, an imaging center and an Urgent Care Clinic. It will be able to serve over 17,000 patients per year, up from 5,000 patients at the current Hilltop clinic, and will draw 50,000 patient visits annually to the area, stimulating economic activity and creating additional retail incentive for development. The project has provided 95 construction jobs to date and is expected to add 30 to 40 additional workers by the end of the project. The fully operational center will provide more than 130 permanent full-time positions.

In addition, the new clinic will be a teaching health center and will have residency programs for physicians, dentists, nurse practitioners, physician’s assistants and pharmacists. Pierce County is currently lacking over 100 primary care providers so these programs will be critical to bringing new providers to the area.

CHC's Hilltop Community Health Care Clinic Under Construction, Tacoma, Washington

CHC’s Hilltop Community Health Care Clinic Under Construction, Tacoma, Washington

The NMTC program enabled CHC to build a clinic to meet the needs of the community. Without the economic assistance NMTCs provided, CHC would likely have had to build a smaller and less adequate facility with fewer programs. Even before completion, the project is making an impact on the community. The Pierce County Economic Council has named it one of the top 10 economic stimulus projects of the year, and the regional office of the Environmental Protection Agency listed it as one of the most successful brownfield programs of the year.

When completed, the clinic will be the first major construction in the Hilltop Community in over 30 years and have a significant impact on the area.

Rendering of Future Hilltop Community Health Care Clinic

Rendering of CHC’s Future Community Health Care Clinic in Tacoma’s Hilltop Neighborhood

The project spurred the City of Tacoma and Pierce County to prepare the way for retail and business expansion. Sound Transit, the local transportation agency, has approved the extension of the light rail system from downtown to the community. And, the Hilltop clinic will provide the only Urgent Care facility in the area giving care regardless of insurance coverage, alleviating the burden on local emergency rooms. The community expects this project to be a catalyst for improving the health of residents and local economic development.

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Bringing Healthcare to Rural Pennsylvania

Drew Pierce, CEO, Prinary Health Network

Drew Pierce, CEO, Prinary Health Network

Primary Health Network (PHN) is a nonprofit Federally Qualified Health Center (FQHC) that began providing community-based comprehensive medical care in 1984. We are Pennsylvania’s largest FQHC with 32 service sites in 11 northwestern counties. We also serve 2 northeastern Ohio counties. In recognition of our high quality of care, PHN has been Joint Commission accredited since 1997 and in 2013, the Joint Commission recognized us as a Primary Care Medical Home.

As part of our service line, PHN is constructing a 45,000 square foot, $11.5 million health and social services facility in Punxsutawney, PA.  This new facility will be completed in mid-2014 and is modeled as an FQHC-Anchored Multi-Service Facility (FQHC-MSF) where our FQHC is the anchor tenant.  Located in rural Jefferson County, the facility will house a variety of services including primary care, a 340(b) pharmacy, services from the local community hospital, women’s health, behavioral health, a café and a public meeting room for community use.

The primary care and behavioral health suites, operated by PHN, will feature 20 medical and 10 behavioral health exam rooms, more than doubling our current capacity in Punxsutawney. The new facility will allow us to serve 38,000 patients per year and increase the types of services offered. With a variety of other health and social service providers co-located in the new building, the facility is expected to significantly enhance the community’s access to care and help the providers realize operating efficiencies and benefit from cross referrals.  It’s estimated that the convenience provided by the co-locators in this FQHC-MSF will provide PHN an additional 7,500 encounters per year and 1,500 additional 340(b) prescriptions per year.

We cannot overstate the value that the FQHC-MSF will bring to Punxsutawney. This project will not only improve health outcomes, but also spur economic growth and development in a struggling community. The facility is expected to house 100 jobs, many of which will be new to the area. The increased foot traffic generated by the facility will also help to shore up other Punxsutawney businesses. The economic impact according to the IMPLAN model conducted for the project suggests the annual economic output for this facility is almost $7 Million.

After struggling to secure financing from traditional banking sources, The Reinvestment Fund (TRF) came through. “There is no luck in business. There is only determination and the development of partnerships with organizations and people who share a similar vision and drive,” explains Jack Laeng, PHN’s CEO. “TRF is such a company with people who understand the mission of health care and our desire to initiate positive change for the communities we serve.”

Stock Photo by Sean Locke www.digitalplanetdesign.com

Mr. Laeng’s quote alludes to the nature of the FQHC business.  While exceptionally reliable borrowers, FQHCs cannot accumulate assets or grow assets similar to regular private businesses. This makes it difficult to raise funds for development or large amounts of funds as equity for projects.  Local banks in today’s lending environment are averse to lending to projects with limited assets or equity.

New Markets Tax Credits provided the perfect financing mechanism for this project to move forward.  NMTC became the main cog in the wheel of financing for the FQHC-MSF. It gave us an affordable method of financing that reduces the debt burden on the project so substantially that it allows us to pass on those savings to the FQHC and other Health Care and Social Service Organizations that typically are very budget-conscious.

TRF and JPMorgan Chase provided $11.5 million of NMTC, which generated $3.4 million in equity from Chase. TRF, partnered with the Low Income Investment Fund (LIIF), to provide a $3.5 million senior leverage loan. TRF also funded an additional $2 million leverage loan for the energy-efficient components of the project. TRF and LIIF also made a $2 million short-term loan to PHN outside of the NMTC transaction to help us make a $3.1 million loan to the project.

This project is part of a national initiative to finance community health centers by LIIF and TRF, with support from the Kresge Foundation. LIIF and TRF are leading nonprofit community development financial institutions that, together, have lent more than $2 billion to support community businesses. They combine this expertise with a patient, nimble approach to financing, especially when working with organizations that are new to capital projects and debt.