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Rain or Shine Reserves – Why Access to Catalytic Capital is Important for Community Health Centers

Monday, December 11, 2017   (0 Comments)
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Montsine Nshom, Co-Director, Community Healthcare Investments, Vital Healthcare Capital

 

The 2016 presidential election and the political climate of 2017 have raised a lot of concerns about the sustainability of community health centers.  By the time this article goes to press, the fiscal cliff may still be unresolved and millions of dollars of funding for community health centers may be in limbo.  The threat of block grants and reduced Medicaid funding also loom, as does the reality of community health centers offering whole-person services that are not always reimbursed adequately – if at all – by payors.

 

And yet despite this, around the country, outstanding community providers are pioneering better models of care for society's most vulnerable.  Amid uncertainty in the healthcare policy environment, continued progress developing cost-effectiveness and quality care for high-need populations is imperative for maintaining support for the community health center movement.

 

Government agencies, commercial banks and Community Development Financial Institutions (CDFIs) can provide capital for community-based providers, usually focused on facility financing and hard asset lending.  But what if a community health center wants to invest in a new line of business?  Or scale a promising model of care?   What forms of capital are available to community health centers that are evolving to meet the complex needs of their patients?

 

Vital Healthcare Capital (V-Cap) is a non-profit social impact loan fund investing in quality care for low-income communities.  As a CDFI, V-Cap offers facility, bridge and business loans.  In July 2017, V-Cap launched our High Impact Loan Program - a limited pool of reduced interest rate loans to support healthcare providers moving critical projects forward during a period of greater uncertainty.  This program finances community health centers pushing forward with innovate, person-centered models of care that meet the needs of the most vulnerable.

 

Take V-Cap’s recent investment in VIP Community Services - a New York City-based Federally Qualified Health Center serving 25,000 individuals annually with a mix of primary care, mental health and substance abuse treatment services.  Like many FQHCs that offer primary care and behavioral health services, VIP was doing what they could to coordinate and integrate these services as much as possible. So when an opportunity to participate in SAMHSA’s Certified Community Behavioral Health Clinic (CCBHC) demonstration project focused on integrating their full spectrum of services presented itself, VIP jumped at the chance to join despite lacking the working capital they needed to truly maximize their participation.

 

V-Cap, in partnership with the Nonprofit Finance Fund, worked closely with VIP to structure a $2 million short-term business loan that VIP will use to recruit staff, expand its space for providing patient care, and implement new programs that will assure a seamless suite of services.   “Our clients often come to us with complex needs for treatment of addiction, mental illness, and chronic disease,” said Debbie Pantin, CEO of VIP Community Services. “We have to treat the whole person, particularly to help people ensnared in addiction to recover and stay healthy.  This investment helps us ensure that everyone we serve has all their physical, emotional and mental health needs addressed.”

 

V-Cap’s investment in VIP is just one example of catalytic capital helping a community health center take advantage of a sunny day – an opportunity to scale a promising model of care – despite the overall overcast of healthcare policy uncertainty.  Vital Healthcare Capital looks forward to connecting with other high-performing organizations to explore what forms of capital are needed for the future.

 

 

 

Vital Healthcare Capital (V-Cap) is a financial partner for healthcare providers that are building better care for the most vulnerable communities, and better jobs for the frontline healthcare workforce.  For more information, visit www.vitalcap.org

 

 

NWRPCA welcomes and regularly publishes white papers and articles submitted by members, partners and associates with subject matter expertise. The appearance of any guest publication in our Health Center News database represents the views of the author and does not constitute endorsement by NWRPCA of the stated opinions or perspectives, nor does it suggest endorsement of the contributor's products or services.


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