Why Stand-alone Family Planning Clinics Struggle to Survive in Age of Obamacare

The wellness center at San Francisco's Mission High School is a busy place during lunch time. Students linger in the reception area and halls, en route to see therapists and the school's nurse, Mary-Michael Watts.

In her small office, Watts sees young patients with a range of concerns, from stomach aches to mental health needs. A big part of her job is counseling students on how to prevent unplanned pregnancies and sexually transmitted diseases, a major health concern in San Francisco. The county is among the highest for chlamydia and gonorrhea rates in the state, according to the California Department of Public Health.

For free checkups, testing, treatment and contraceptives, Watts has referred hundreds of students -- many of whom are low income -- to the New Generation Health Center, about a mile from Mission High. The clinic has provided free reproductive health services to teens and young adults for 20 years, and Watts considers New Generation a key resource.

"Everything they do is reproductive health related," Watts says. "They have a heightened radar and sensitivity to any kind of abuse that might be taking place and to the general well-being of the student that might be missed in a primary health clinic."

So Watts and her young patients were shocked to learn that New Generation was supposed to close down in July due to financial troubles. The UC San Francisco family planning clinic has lost patients for years and became financially unsustainable, university officials say.

The news did not sit well with dozens of supporters who protested UCSF's closure plans and vowed to save the clinic. After a growing outcry, UCSF Chancellor Sam Hawgood agreed last month to cover New Generation's budget deficit of about $400,000 -- for one year. But Hawgood stressed the clinic remains on shaky financial footing and must still find long-term solutions.

New Generation's troubles stem in part from the very specialization in reproductive health that has made it such a valuable resource for young patients in the Mission District, say experts. They contend that the Affordable Care Act has changed the business model for clinics like this, forcing most to transform by adding primary care services or merging with other health centers in order to remain competitive.

Obamacare Shifts Business Model for Family Planning Clinics

New Generation saw about 2,200 patients last year, 27 percent less than in 2011, says Dr. Rebecca Jackson, who supervises the clinic. Jackson took the initial decision to close New Generation after the clinic lost foundation grants -- a key source of revenue -- and dipped into the red.

"Over the years, we tried everything we could think of actually to keep it open and just came up against a wall," says Jackson, an obstetrics and gynecology professor at UCSF.

Jackson attributes New Generation's loss of patients in part to the Affordable Care Act.

Since the Affordable Care Act was fully implemented in January, 2014, nearly five million low-income Californians have gained Medi-Cal insurance. Those newly insured can now get medical services from head to toe at primary care clinics that also offer reproductive health. That's why Jackson doesn't see New Generation getting a lot more patients back any time soon.

Even when patients with Medi-Cal choose New Generation for their reproductive health care, those payments are not enough to keep the clinic afloat, says Jackson, as Medi-Cal's reimbursement rates are among the lowest in the nation.

New Generation's main source of patient revenue had been a more generous program than Medi-Cal, the state's Family Planning, Access, Care, and Treatment program, or Family PACT. But that program has seen significant drops in enrollment as more people gained comprehensive insurance.

The clinic saw these changes coming, says Jackson, but wasn't able to adapt successfully.

"We tried a lot of different kinds of things to keep it open, like partnering with a primary care clinic, for example, or potentially getting another clinic to take us over, and it was difficult and couldn't get anyone to do those things," says Jackson.

UCSF is now forming working groups with community members to figure out how to salvage these services for low-income teens in San Francisco, either through keeping New Generation open or through other providers.

Family Planning Centers Transform

Other reproductive health centers, such as Planned Parenthood, have added more kinds of services or merged with other clinics in order to stay competitive in the age of Obamacare, says Amy Moy from the California Family Health Council. The agency is responsible for distributing federal funds for family planning to more than 60 health organizations. That money trickles down to 340 health centers statewide.

While mergers can cut down costs, adding comprehensive health services allows clinics to potentially become federally qualified health centers, with enhanced reimbursement from Medicare and Medi-Cal and other benefits.

Clinics like New Generation face a tough road to stay in business unless they change, Moy says.

"The numbers of family planning health centers that are stand-alone or women's health centers that provide primarily family planning services really are dwindling," Moy says. "And we anticipate that trend to continue."

Still, she says these types of clinics remain important -- especially for adolescents who value confidentiality.

"A big fear is if there is a loss of those safe spaces that teens won't ... access these services that they need to stay safe and help prevent unintended pregnancy," Moy says.

Teen Patients Prefer Confidential Services

Mission High student Damaris Bonner says she prefers New Generation to other clinics in the area, and its potential closure is frustrating.

"That’s the one clinic I felt comfortable at," says Bonner, 17. "It makes no sense to close it down."

Like other patients, Bonner likes New Generation's confidential services. Because it's a space dedicated to youth, she doesn't fear running into parents or aunties there. Another plus is that the small clinic offers same-day appointments that are hard to come by elsewhere.

Other clinics offer reproductive health in the area, which UCSF officials say ameliorates any impact of a potential closure to patients. Still, Bonner feels local teens would face extra barriers to access reproductive health if New Generation closes. She resents that a clinic she and other young people trust could be "taken away."

"It's like, why? Let us youth take care of ourselves," says Bonner, who has been a patient at New Generation for nearly two years. "It's crucial that we have these tools for us because when we don't that's when you start seeing unplanned pregnancies and STDs."

Mission High's nurse Watts is following closely developments about New Generation. She fears losing the clinic could translate to unplanned pregnancies and STDs among students .

"It kind of terrifies me to think that I might not be able to pick up the phone and call them," says Watts. "New Generation is an integral part of my job."