In October, the San Francisco Chronicle featured two stories featuring the merger of Haight Ashbury Free Clinics and Walden House.  Both articles recounted the drop in funding experienced by both organizations and the potential loss of services to the community. The stories also pointed out the efficiencies gained by combining administrative functions. The merged entity is expected to save approximately $1 million within a $60 million budget.

As the facilitator of this merger (and a former executive director with experience in behavioral health), the most compelling outcome was the creation of a seamless service delivery system to address the needs of clients in a more holistic way. By unifying services to address substance abuse addictions, mental illness, homelessness, and to provide job training and primary health services, this merger will help to ensure that client needs do not slip through the cracks of a fragmented delivery system.

In the mainstream dialogue about nonprofit mergers, the focus is often on efficiency and cost-savings, but ultimately these alliances must make sense from a mission perspective: How can services be integrated and provided in a more effective manner? What will payers – in this case the City and County Department of Public Health – find attractive for contracting?

The landscape of services in San Francisco is fragmented, with many separate organizations providing numerous different services addressing specific client needs.  However, in most cases, they are not comprehensive, integrated services. The merger of Haight Ashbury Free Clinics and Walden House creates a more seamless approach, such that clients do not have to go in search of services from multiple entities to get the care they need.

Under health reform legislation, community health centers were to have received $11 billion over five years to expand their capacity to care for the 32 million people who will be newly insured as of 2014. However, federal budget deals have effectively gutted the expansion allocation for 2011 – and 2012 is looking equally grim. With just three short years to prepare for a dramatic increase in demand, community health centers can no longer be certain of the funding necessary to build or upgrade facilities, or to hire additional staff, to ensure that the millions of newly insured have a place to go.

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