March 21, 2023
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In ‘financial emergency,’ SB Neighborhood Clinics could close without funding


Santa Barbara Neighborhood Clinics is in danger of closing its doors by the end of July if it doesn’t raise hundreds of thousands of dollars in the next few months.

The nonprofit clinic, which provides free health care to uninsured and underserved members of the Santa Barbara community through its four branches, held a press conference on May 22 to address what acting CEO Mark Palmer called a “financial emergency.” He said the clinic is immediately starting a campaign to raise money from the community to keep the clinic from going under.

“What we need from the community is six months of financial support,” Palmer said, adding that operating the clinics for six months requires $1.5 million. The organization currently has a $200,000 deficit each month, and Palmer said the clinics will close within six months if the agency doesn’t raise at least $200,000 per month to cover the next nine weeks of operating costs. “Then, at the end of six months, we’ll have a clear business plan.”

At the press conference, clinic officials said they realized about half a year ago that the agency was in dire financial straits. Its doctors and dentists see about 17,000 patients a year, and the number of uninsured patients coming to the clinic has increased by 10 percent in the last 12 months, creating an even bigger strain on its finances. During the same time period, donations from the community fell by 33 percent, something Palmer attributed to the slow economy.

Another major source of funding for the agency is federal grants, and officials said the clinic’s access to those has decreased over the years. Add to that the costs of implementing the Affordable Care Act and the electronic health record system, and the clinic is in the midst of a perfect financial storm.

Santa Barbara Neighborhood Clinics has partnered with Cottage Health System, and the latter found and paid for a health care management consulting company to help the clinic find ways to climb out of its deficit. The consultant, Financial Healthcare Strategies, is working with the clinic on ways to change its business plan to earn enough money to continue operating.

The first step in that plan is asking for community support. “This is about the health of the community,” Chief Medical Officer Dr. Charles Fenzi said at the press conference. He said the entire region would suffer negative side effects if the clinic closed its doors. “Seventeen thousand people would have to get health care elsewhere. The community doesn’t have the resources for that. They’d all end up in the emergency room.”