Minnesota Community Health Centers to consider reducing services, closing clinics amid federal funding concerns

NINA MOINI: Thousands of organizations that rely on federal funding have been on a roller coaster ride this week. President Donald Trump has laid out a slew of executive orders that indicate a funding freeze within a wide variety of services and jobs. A judge paused the freeze, and then the administration rescinded the order. One industry that's been jerked around seemingly hour by hour with this back and forth is health care.

Community health centers, which were established during the civil rights movement to support people without the money to pay for medical services, use federal money to operate. Jonathan Watson, the CEO of Minnesota Community Health Centers, said that this week, the 17 centers across the state have been facing uncertainty about their future. Jonathan's on the line now to talk about it with us. Thank you for being here, Jonathan.

JONATHAN WATSON: Good afternoon, Nina, and thank you for having me.

NINA MOINI: I know there are a lot of moving parts. What has this week been like for you in the role that you've been in, and where are you at right now?

JONATHAN WATSON: I think you captured it very well when you described it as a roller coaster. It has absolutely been that way for our 17 health centers that are located throughout the state of Minnesota, along with the 1,400 health centers that are in the United States, serving 33 million Americans. But you really captured it well.

By Monday, we heard of this freeze, and that would directly impact about $45 million worth of funding coming to the state's 17 health centers. That's about 18% of an average health center's budget. And so immediately, almost that evening, I know a couple of health centers were calling emergency board meetings to assess their options moving forward.

On average, a cost to health center about $40,000 a week with this pause. So they were taking some drastic actions, and it really ranged on the spectrum from we're going to look at reducing services within a month or two to some health centers actually deciding to shutter sites almost instantly, potentially, within a week.

NINA MOINI: Is this the type of-- are these the type of actions that you were preparing for? Did this catch you off guard?

JONATHAN WATSON: It did catch us off guard, and I should back up a little. We did enter into 2025 in very financially tenuous position as a movement of health centers. About 3/4 of our health centers were projected to have negative net margins in 2025. So this was just more kerosene on the fire, if you will. We are anticipating, obviously, with the Trump administration and the executive orders, some turbulence, but we were definitely surprised by this, especially given the bipartisan support of health centers over 60 years in the United States.

NINA MOINI: When you heard about the freeze from the courts and then the rescinding from the administration, what now or what after that, did you think, OK, well, now we don't have to plan for that type of a thing? Or, are you still actively hearing that people are planning for uncertainty?

JONATHAN WATSON: Yes, they're most definitely planning for uncertainty. With the rescission of the memo that makes the Monday deadline a moot point at this point. But nevertheless, we've been tracking with our 17 members, their ability to draw down portion of this $45 million. And only four of our 17 members have actively been able to secure these monies into their bank accounts as of just 20 minutes ago when we last checked in.

So they're still very anxious. It would be the understatement of the year here. But nonetheless, so they are still looking at plans moving forward. And again, the threat of those executive orders, given what the white house press secretary said yesterday, still could be in the mix for us as we're looking at our future funding.

NINA MOINI: Can you say for listeners who might not know the difference between what a community health center is, how it differs from other health care providers? Because if it's not paid for this way, the expense will still be there, right?

JONATHAN WATSON: Yeah, that is correct. So a community health center is a unique provider type within the system. We really rest on your laurels. We are located in medically underserved areas. We're governed by patients that use the health center. We provide medical, behavioral, health, and dental services all under one roof. And we do serve all regardless of ability to pay.

And really, our mantra, if you will, is to keep communities healthy, keep them out of emergency rooms, avoid those hospitalizations, avoid needing to have access to specialty care. So we're all promoting health and wellness. Preventative care is really what we're promoting here in the communities we're located in.

NINA MOINI: Well, and 17 centers, 17 doesn't sound like a lot of centers for a state of our size. We have, what, 87 counties? Is there a greater need? And does it differ by rural urban areas?

JONATHAN WATSON: Yeah, absolutely. So again, there are 1,400 health centers throughout the United States. We have 17 here in the state of Minnesota. We have five health centers in greater Minnesota outside the twin cities area, and they operate multiple sites. We're in about 80 different service delivery locations.

But there are absolutely areas of the state that are not served by a community health center, and we continue to work with Congress to appropriate additional dollars to begin to expand the community health center model because, frankly, it saves money at the end of the day. We have voluminous studies about the savings, particularly to the Medicaid program, again, that avoiding those emergency room trips, the inpatient hospitalization and specialty care.

NINA MOINI: Are you concerned about the Trump administration's approach to Medicaid?

JONATHAN WATSON: Yes, most definitely. We've seen not only the Trump administration and some of the lead up to the election but also some activity that we're seeing in the House Republicans. The budget committees are looking at about $2 trillion worth of cuts to the Medicaid program, and that's an important payer source for us as health centers. Roughly, 50% of our patients are on Medicaid.

And so this creates a large fiscal hole in state budgets, which could translate to reduce benefits, reduce eligibility, creating additional uninsured. And as we all know, without insurance, it's very hard to access specialty care and the like. So those definite cuts to Medicaid coming down the pike, we're extremely concerned about.

NINA MOINI: So we've talked about your perspective, the providers, the administrative side of things. Are you hearing from patients? And are they concerned?

JONATHAN WATSON: We are hearing. Our health centers definitely hearing on the front lines, hearing about concerns from patients as they're hearing about these freezes, federal funding freezes, Medicaid cuts. And I think the message has always been for 60 years that health centers please come in for your primary care services, whether it's getting your teeth cleaned, it's that annual physical, it's a cancer screening. If we also have substance use disorder opioid services, please contact your community health centers. We are open for business, ready to serve you, absolutely.

NINA MOINI: So you're wanting to remind people that the services are still there. I do want to ask as well, about some of the confirmation hearings that are going on for Robert F. Kennedy, who would be the nation's top health official. Have you been following that closely? And as a health care provider, what is striking to you?

JONATHAN WATSON: Yes, we've been following the, at least, yesterday's and today's appearances before the senate committees of Robert Kennedy Jr. And yesterday, the little bit that I did see of it, I know his answers in the Medicaid space was a little striking in terms of a little bit confusion on how the program works. So we're hoping that he really is a strong proponent of the Medicaid program, given the cuts we just talked about.

But I did like a lot of things that I heard yesterday. I think he brought to the forefront the role of chronic diseases in spending in our country. Right now, in our $4.9 trillion health care system. For every dollar spent, only $0.05 or $0.07 is spent on preventative care. If we could double or triple that, that's a strategy to really combat chronic diseases. He's spot-on correct about that. And community health centers have a profound role on that.

The other two things I did see yesterday from Robert Kennedy Jr. was his support of telehealth. We've embodied that as well, a lesson from the pandemic. And Senator Warner from Virginia pushed him a little bit on community health center funding, and he publicly stated he's supportive, as is the Trump administration, of community health center funding. And then, lastly, a lot of his work historically is food as medicine. We're strong proponents of that as well. It's in our DNA as community health centers, this wellness approach to health care.

NINA MOINI: We know you're going to be keeping a close eye on this, and we invite you to come back and continue to update us on how things are going, Jonathan. Thank you.

JONATHAN WATSON: Appreciate it, Nina. Have a good day. Thank you.

NINA MOINI: You too. That was Jonathan Watson, the CEO of Minnesota Community Health Centers.