THE CENTERS' SOURCES OF FUNDS, 1971 vs. 1969

From 1969 to 1971, the average level of funding per community mental health center increased from $847 thousand to $1.022 million. Funds from all government sources (i.e., Federal, State, local government and "other" government funds) also increased during this period, from $676 thousand to $739 thousand per center. Relative to the growing revenues from nongovernment sources, however, government dollars comprised a decreasing percent of the centers' total income (from 80 percent in 1969 to 72 percent of total revenues in 1971). The decreasing proportion of government funds to total revenues was due primarily to the percent of revenues contributed from State and local governments (Table 1),

Although State funds increased on the average from $273 thousand per center in 1969 to $294 thousand in 1971, this nevertheless represented a decreasing share of the centers' total resources (from 32 percent to 29 percent).

The local government share per center has steadily decreased from $105 thousand in 1969 to $88 thousand in 1971 and in relation to the centers' total resources from 12 percent to 9 percent.

Federal support which declined from $291 thousand per center in 1969 to $280 thousand in 1970, rose again in 1971 to $348 thousand, exceeding its 1969 level, and reflecting the effect of the 1970 Poverty Amendment (PL 91-211) which increased the Federal matching share for centers in poverty designated areas. With respect to the centers' total revenues, the Federal share remained at about 34 percent for 1969 and 1971.

From 1969 to 1971, the percent increase in receipts from services more than compensated for the declining local and State government shares. Receipts from services increased as a percent of total revenues from 16 percent to 24 percent. This increase is due largely to growth in reimbursement for services by third party payors, both the public and private sectors, rather than growth in patient fee collections (Table 1).

Receipts from patient fees oscillated from 1969 to 1971, showing a slight overall increase per center from $55 thousand in 1969 to $64 thousand in 1971 and registering between 6 percent - 8 percent of the funds from all sources during that period.

Payments from private insurance increased substantially, from $46,000 per center in 1969 to $95,000 in 1971 and from 5 percent to 9 percent of all sources of funds.

From 1969 to 1971, reimbursements from Medicare more than doubled, viz., from $9,000 to $20,000 per center and from 1 percent to 2 percent of the total revenues from all centers. Reimbursements from Medicaid during this period almost trebled, viz., from $18,900 per center in 1969 to $52,000 in 1971, and

from 2 percent to 5 percent of all sources of funds. Since a large number of centers reported no reimbursements from insurance, Medicaid or Medicare, the percent increase in these sources of funds reflects large increases in some

centers.

Fund raising provided 2 percent of the centers' total financial resources in 1971. Between 1969 and 1970, funds obtained by fund raising more than doubled (from $2 million to $5.5 million) representing an increase from 1 percent to 2 percent of the centers' total income. However, a much smaller increase in fund raising receipts was reported in 1971, and as can be noted in Table 13, fund raising appears to represent a declining source of funds for centers after the first three years of operation.

REGIONAL DIFFERENCES IN FUNDING PATTERNS: 11/

Differences can be noted in the funding patterns of the 10 administrative regions (Tables 10 and 11). Funds from all government sources ranged from 54 percent of all revenues in Region VII (Kansas City) to 89 percent of all revenues in Region VIII (Denver), with most regions reporting total government funds amounting to between 70 percent - 80 percent of all revenues. The relatively low proportion of government funds reported by centers in Regions VII (Kansas City) and IX (San Francisco) to some extent, may be explained by the larger number of "older" centers in these regions which are reporting a declining level of Federal support. The number of years the centers have been in operation however, is not the only explanation for this finding since at each age level, center reporting revealed considerable variation in the extent to which government funds comprised total revenues.

In most regions, Federal dollars are matched or almost matched by State dollars. In Regions V (Chicago) and IX (San Francisco) however, Federal funds are somewhat exceeded by State funds. In Region IX, the heavy contribution to centers in the form of Short-Doyle funds in California helps to account for this finding; in Region V, this funding pattern may be attributed to the substantial center support provided by the States of Wisconsin, Michigan and Minnesota. At the other extreme, in Regions I (Boston) and X (Seattle), twice as many Federal dollars as State dollars supporting the community mental health centers and in Region VII more than six times as many Federal as State dollars are reported. The relatively low contribution of State funds reported in Region VII by the centers in Missouri (4 percent) and Kansas (4 percent) results from the absence of a Community Mental Health Services Act in these States. Lacking the Act, Kansas and Missouri have no statutory authority to support mental health facilities other than State mental hospitals and this is reflected in the low percent of State funds reported by the CMHC's in these States. 12/

To examine the effect of State Community Mental Health Services Acts on the percent State funding of federally funded CMHC's, States with and without such legislation were compared. On the average, State funds comprised a

smaller percent of the

centers' total resources for the group of States without Community Mental Health Service Acts, viz., 12 percent as compared with 32 percent for the States with such legislation (Table C).

TABLE C. STATE FUNDS AS A PERCENT OF TOTAL REVENUES IN FEDERALLY FUNDED COMMUNITY MENTAL HEALTH CENTERS: A COMPARISON OF STATES WITH AND WITHOUT COMMUNITY UNITED STATES, 1971* 19/

MENTAL HEALTH SERVICES ACTS,

Excluded are those States having only a single federally funded community mental health center as well as those represented by data from less than half of their centers.

Receipts from services as a percent of total center revenues range from 10 percent in Region VIII (Denver) to 39 percent in Region VII (Kansas City), with the national figure falling at 24 percent (Table 10).

Patient fees in relation to the reimbursements from third party payors do not appear to follow any discernible pattern (Table 11). It may be observed that a higher proportion of Medicaid payments appeared to be reported from centers in the Northeastern and West Coast areas (Regions I, II, III, IX, and X). Insurance comprises the largest segment of receipts from services, providing 9 percent of the centers' total revenues and ranging from 3 percent in Region VIII (Denver) to 16 percent of total revenues in Region IX (San Francisco).

Revenues from fund raising as a percent of total revenues ranged from 0.3 percent in Region III (Philadel phia) to 4.7 percent in Region VII (Kansas City), with the national figure at 2.4 percent. The relatively large percent of income derived from Fund raising reported for Regions VII (Kansas City) and IX (San Francisco) was due to the successful efforts of single centers.

CENTER CHARACTERISTICS AND SOURCES OF FUNDS

Age of Center 13/: In comparing "older" and "younger" centers, it should be remembered that a comparison is being drawn between newly funded centers with those which were federally funded more than four years ago. Since these are not the same centers viewed over time but different centers, examined at a point in time, conclusions which suggest funding trends exceed the limits of the data.

The average income per center increased directly with the increasing age groups of the centers - from $859 thousand per center in operation for less than 11⁄2 years to $1.155 million for centers in operation for four or more years (Table 12).

Reflecting the Federal formula for decreasing matching shares, Federal funds decreased from 42 percent to 27 percent of the centers' total revenues for centers operation for less than 11⁄21⁄2 years and four or more years, respectively (Table 13). Converted into dollars, this is a decrease of Federal dollars from $356 thousand to $310 thousand per center for centers in operation less than 1 and 4 or more years, respectively (Table 12). Also noteworthy is the reduced percent of staffing grant and research and training funds in the "oldest" centers. Staffing grant funds dropped from 31 percent to 22 percent of total center revenue and research and training funds were decreased by more than 50 percent, from 5 percent to 2 percent, in "young" and "old" centers, respectively.

In contrast to Federal funds which were smaller in the "older" centers, State funds were larger in the "older" centers -- $236 thousand per center or 28 percent of total revenues in centers in operation for less than 11⁄21⁄2 years as compared with $368 thousand per center or 32 percent of the total revenues in centers in operation 4 years or more. Local government dollars per center almost doubled -- from $69 thousand to $124 thousand in the "youngest" and "oldest" centers, respectively although this change represents a relatively small increase in the centers' total revenues (from 8 percent to 11 percent).

Centers in operation for a longer time derive a larger percent of their income from the services they provide. For the centers in operation for less than 11⁄2 years, total receipts from services provides 19 percent of their income; for centers in operation for more than 4 years, 27 percent. Receipts from patient fees and Medicaid account for most of the increase in receipts from services accompanying an increase in years in operation (Tables 12 & 13).

Fund raising decreased from 3 percent in the youngest group of centers to 2 percent in the oldest.

Centers in Poverty and Nonpoverty Designated Catchment Areas (Tables 14 & 15) Similarities and differences emerge from a comparison of the funding patterns of centers differing with respect to the affluence of their catchment areas. Government funds were a slightly larger percent of total center revenue in centers from poverty designated areas (74 percent as compared with 71 percent in centers from nonpoverty areas). They diminished as a percent of total income for centers in both poverty and nonpoverty catchment areas grouped by increasing years in operation. For "poverty" centers, government funds were 80 percent in the newest group of centers and decreased to 72 percent in the oldest; for "nonpoverty" centers, the decrease was from 74 percent to 69 percent.

Due to the differential funding of poverty centers (1970 Poverty Amendment PL 91-211), Federal funds comprised a much larger percent of their total income. For centers in operation less than 11⁄2 years in poverty areas, total Federal funds comprised more than half of their total revenues (57 percent) as compared with 25 percent for centers in nonpoverty catchment areas. Even in centers which were in operation for 4 or more years, Federal funds still comprised a larger fraction of total revenues in "poverty" centers (32 percent as compared with 23 percent in "nonpoverty" centers; Tables 14 and 15). In both types of centers, however, Federal funding decreased with the number of years the centers were in operation although the decrease in "poverty" centers was more exaggerated. For centers in poverty designated areas the Federal share was 57 percent of total revenues for the "youngest" centers and declined to 32 percent for the "oldest" centers; the corresponding figures for the "nonpoverty" centers were 25 percent and 23 percent. State funds as a percent of total revenues increased with age of poverty centers but decreased with age of nonpoverty centers. For "poverty" centers, State funds represented 16 percent of total revenues for the "youngest" centers and 33 percent for the "oldest"; the corresponding figures for the "nonpoverty" centers were 40 percent and 31 percent. After the 4th year in operation, centers derived about the same proportion of their income from State funds irrespective of the affluence of the catchment area (about 1/3). Local government support for centers in poverty areas was less than that found in nonpoverty areas (6 percent as compared with about 11 percent respectively of the total center income) and remained at about 6 percent regardless of the number of years the centers were in operation. By contrast, local government funds for centers in nonpoverty areas increased for older centers