This research brief, the third in a series examining the link between national health reform proposals and community health centers, estimates the cost savings that would be realized by making important investments in non-profit health centers as an element of national health reform. An earlier report estimated that, under the draft House health reform proposal (as of July 14, 2009), the number of health center patients would increase to 35.6 million by 2015 and 39.0 million by 2019, greatly expanding the reach of community health centers in thousands of medically under-served communities across the nation. We also estimated that if health plans sold in the proposed health insurance exchanges paid rates comparable to the Medicaid FQHC payment rate, health center capacity could reach 41 million patients by 2019.

Based on new analyses of the 2006 Medical Expenditure Panel Study (MEPS) examining the differences in annual total health care costs for health center users and non-users and based on our projections of changes in Medicaid caseloads at health centers, we estimate:

• In 2009 health centers serve 19 million patients. This generates health system savings of $24 billion in 2009, because of the substantially lower overall cost of care by health center users when compared with non-users.
• Increasing health center capacity under health reform by another 20 million will generate an additional $35.6 billion in savings in 2019, and $212 billion in additional savings over the 2010-2019 ten-year time period. (This estimate does not include savings for the 19 million patients already being served).
• Were the Medicaid prospective payment rate system to be applied to exchange health plans, the number of additional patients served by health centers would rise to 22 million patients by 2019, bringing the total of total patients served to 41 million. This investment would create overall health care savings of $39.7 billion in 2019 and $251 billion over the 2010-2019 time period just for the 22 million new patients served.
• Federal Medicaid savings would exceed $59 billion over the ten-year time period under the health reform proposal, an amount greater than the $38.8 billion in additional health center investments made over the decade under the draft House bill. If the prospective payment system were to be applied to exchange health plans, federal Medicaid savings would exceed $70 billion over ten years.