Ingham County’s federally qualified health centers are facing an operational shortfall of up to $4.5 million. Officials are considering cuts to essential services and layoffs to offset the deficit.
The county’s 13 community health centers rely on funding from federal and local government along with Medicaid reimbursements to deliver medical care at a lower cost to 9,000 people every year. Not every patient that comes through the clinics’ doors qualifies for coverage and many lack health insurance, putting a financial strain on the clinics.
“We have a substantial deficit going through June of this year that it looks like its approximately $2.68 million and the Ingham County Health Department is claiming that it’ll be about $4 million by the end of the fiscal year that ends in September,” said Ingham County Health Center Board Chair Mary Malloy.
The Ingham County Health Department’s deficit could grow by about $400,000 every month if left unaddressed, according to county officials.
The clinics have already cut contractual labor but it's not enough to completely offset the shortfall, according to Malloy.
The Health Center Board is considering four different scenarios involving layoffs and site closures.
“The first scenario involves laying off some staff but not closing any sites,” Malloy said. “We have other scenarios that get progressively more involved with site closures.”
The centers operate through a cooperative agreement with Ingham County. That agreement allows the centers to receive reimbursement for the services they provide.
This week, the Ingham County Board of Commissioners voted to extend the cooperative agreement with the health centers until September. Officials with the community healthcare clinics say that agreement has caused the shortfall.
“We are charged money for county services, and we are charged money for the health department financial staff and we don’t know how much time they are spending working on the clinics versus the health department,” explained Malloy. “There’s no real good tracking system to know if we’re being charged the right amount or not.”
Malloy says part of the problem is also an operational budget that overestimated the number of patient visits eligible for reimbursement.
“They had budgeted for over 100,000 visits and only had 60,000,” she said.
Malloy would like to diversify the clinics’ funding sources.
“Personally, I would like to set up a foundation so that people in other organizations could donate money to the health centers,” said Malloy. “That would help us in the long run, but it would probably cost some money to get off the ground.”
This isn’t the first time the Ingham County Community Health Centers have run a deficit in their budget. Back in 2023, the county fronted an additional $2.9 million dollars to cover that year’s shortfall, according to Ingham County officials.
“We ended up using $7.6 million in general funds,” said Ingham County Commissioner Ryan Sebolt. “This year, we had already planned on an allocation of $5.7 million in general funds, but we will probably require close to $10 million in funds.”
County officials say they want to continue to support the clinics financially but in a more modest approach.
“We are committed to finding resolutions with the Ingham County Health Centers Board and making sure that this critical service continues into the future,” said Sebolt.
The Ingham County Board of Commissioners is hiring an accounting firm to investigate the clinics’ financial situation and the report is expected in October. The health centers’ board is scheduled to meet on Aug. 8 to decide on the clinics’ future.
