Resources

 Are You Ready? Essential Preparation Activities to Move Your Capital Project Ahead

Does your health center need to expand or renovate to meet patient demand? If so, it’s important to begin planning as soon as possible so your concept is clear and well-thought-out. Even with efficient planning, the capital development process is complex and can take more than two years from initial project concept to completion. Planning ahead gives you the best path to success. This article describes key preparation activities for capital projects and related resources to help you get started.

      1. Strategic Planning

Strategic planning is vital to ensuring that your plans for programming and capital planning are informed by the changing environment in which your health center operates; it helps ensure that everyone on your staff and the Board is aware and supportive of a proposed capital project. Examine your readiness by reviewing your strategic plan. Creating a Dynamic and Useful Strategic Plan, a toolkit created by NACHC and Capital Link, can help. Access it here.

      2. Market Analysis

Knowing your patient base and your community needs provides an important foundation for executing your capital plan. This information allows your organization to offer culturally relevant programs that meet the demand for services, helping your health center meet its mission of accessible care. Understanding patient trends and needs will help you plan for your facility and reduce the chances of over- or underestimating the future need for services (and therefore over- or under-building). Access a recording of our recent webinar here.

      3. Financial Health and Debt Capacity

Reviewing relevant comparative financial benchmarks will help your health center determine financial soundness (and therefore project readiness). Lenders and funders are more likely to be responsive to a health center with strong financial performance. Capital Link’s recently updated Performance Benchmarking Toolkit for Health Centers: Tracking Data to Improve Financial Performance can help health centers determine key metrics to track. Access it here.

Health centers should also determine their ability to take on loans to fund a project by completing a debt capacity sensitivity analysis. Access our free debt capacity calculator here.

      4. Operations and Facilities Assessment

Health centers should examine if they’re operating both effectively and efficiently before embarking on a project. At minimum, clarify your operational model, analyze your productivity and patient utilization, and evaluate your programs. To learn about the operating models, strategies, and practices of high-performing health centers, access our publication, Hallmarks of High Performance: Exploring the Relationship between Clinical, Financial, and Operational Excellence at America’s Health Centers here. For information and tools to support the Patient-Centered Medical Home (PCMH) model of care in health centers, visit the PCMH publications page on our website.

There are also physical space considerations to consider. Before you plan a new space, take into account the age and condition of your existing space, your ideal configuration based on your model of care, and community and partner space requirements. This will ensure your space is adequate and appropriate.

      5. Funding Sources

Start thinking about how to pay for your capital project as soon as possible. There are a range of funding options that can help health centers complete a funding plan, including: New Markets Tax Credits, federal/state funds, Community Development Financial Institutions (CDFI) investments, foundation grants or Program Related Investments, bank loans, tax-exempt bonds, US Department of Agriculture (USDA) loans, and the HRSA Loan Guarantee Program (LGP). Capital Link provides a broad range of financing assistance for health centers looking to raise capital and structure loans for expansion projects. Contact us for help determining the best combination of funding options utilizing term sheet negotiations, financial projections, and modeling. 

For more information on readiness activities, access a recording of our recent webinar on this topic here or download a free copy of our recently updated publication:

Preparing for a Capital Project: Are You Ready? A Guide for Health Center Staff and Boards 
This recently updated publication provides guidance on evaluating health center readiness to begin the capital development process, with the goal of being prepared for funding opportunities when they arise. Each section reviews a key planning activity and the essential questions to ask before beginning a capital project, along with context for why the question is being asked, and advice for next steps. Download here: http://www.caplink.org/capital-planning-tools

Now Live: Capital Link's Debt Capacity Calculator

With Capital Link’s recently added Debt Capacity Calculator on our website, health centers can easily obtain a preliminary estimate of debt capacity and better understand the "gap" that may need to be funded through equity contributions and/or a capital campaign needed to complete a capital project. Debt capacity is the amount of debt a health center can afford to take on, given its historical or projected financial position. This estimate, which includes your health center's existing debt, is based on your historical financial performance, and as such, provides a starting place to consider your possible future debt capacity. Access the calculator here.

Policy Brief from RCHN Community Health Foundation Research Collaborative Describes Health Center Growth and Challenges

The Geiger Gibson/RCHN Community Health Foundation Research Collaborative at Milken Institute School of Public Health has released a policy brief reporting steady growth across the 1,362 community health centers throughout the country. This brief highlights the impact of the Affordable Care Act (ACA) Medicaid expansion and continued grant funding. To access the report, click here. To view the press release, click here.

Analysis from NACHC Shows Health Centers Are Serving More Medicaid Patients Than Ever

A new analysis from the National Association of Community Health Centers reveals that health centers are serving more Medicaid patients than ever. Findings show that in 2018 health centers served 1 in 5 Medicaid beneficiaries (up from 1 in 6 in 2018, or roughly 14 million people). The growth in Medicaid patients is significant since research has shown that health centers generate cost-savings for the public insurance program. In fact, a landmark study found that in 13 states health centers save, on average, $2,371 (or 24 percent) per Medicaid patient when compared to other providers. Also, health center Medicaid patients are less likely to turn to costly hospital and emergency department-related services than patients of other providers, even under managed care. Having both an insurance card and regular access to care at a health center is pivotal. Medicaid patients use these tools and stay healthy [see NACHC Medicaid Fact Sheet] with a range of comprehensive services available under one roof. To learn more, click here.