Cutting the Umbilical Cord

Can family planning clinics survive without government funding?

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When Margaret Sanger and her friends opened the first birth control clinic in 1916 in New York City, they were arrested for "maintaining a public nuisance." Today, nearly 5 million women a year use the services of organized family planning providers, and attacks on family planning are more subtle.

Prodded by the New Right, the Reagan administration and conservative congressional members have mounted a several-pronged campaign against family planning, which since the mid-1960s has been increasingly funded by the federal government. According to Rep. Henry Waxman (D–Calif.), President Reagan lamented to a Republican member of Congress in 1981, "I regret that we do not have the votes to defeat the family planning program."

Failing that, the Department of Health and Human Services (HHS) has subjected family planning clinics to a series of harassing audits. Neither these nor a General Accounting Office audit requested by Sens. Orrin Hatch (R–Utah) and Jeremiah Denton (R–Ala.) have turned up serious violations of federal law—using federal funds to pay for abortions, for example, or to lobby for or against legislation.

In 1982, the administration switched tactics, drawing on its regulatory arsenal. In February HHS proposed a new rule for family planning clinics that receive federal funds. The clinics would have to notify parents when prescribing birth control pills or contraceptive devices for teenagers 18 years old and younger. In the 60-day comment period following the proposal of this "squeal law," as it has been called, HHS received a record number of letters, and they were 4 to 1 against it. Apparently knowing a political hot potato when it saw one, HHS did nothing: the regulation has not been promulgated—but it hasn't been rescinded, either.

Then, in November 1982, came another regulatory assault from Health and Human Services. Under proposed new guidelines for hospitals and clinics that receive federal funding for family planning services, these services and any abortion activities would have to be completely separated. Office space, personnel, publications, stationery, and medical equipment and supplies could not be shared. The guidelines even require—regardless of the number of abortions performed—separate entrances and exits for the family planning program and abortion facility. Hospitals would be particularly hard-hit.

In a strategic move, this new rule was proposed as a guideline instead of a regulation, relieving HHS of the obligation under federal law to solicit and consider public comment on proposed regulations. This time, public opinion would not be allowed to throw HHS's new rule into limbo.

Planned Parenthood, as the most visible and powerful family planning organization, is closely watched by the New Right for its reaction to such developments. It is no secret that the fervent hope of the New Right is that the Reagan administration, through a combination of "defunding" (federal funds for family planning were cut 25 percent in the last fiscal year) and onerous regulations, will pull the rug from under Planned Parenthood and family planning programs in general.

For its part, Planned Parenthood seems determined not to tumble so easily. Faye Wattleton, president of the Planned Parenthood Federation of America, responded to the proposed parental notification regulation with a statement that the organization would stand firm with its "long and distinguished history of providing confidential services to millions of Americans." Promising that if the regulation is implemented, the organization will file suit on behalf of teenagers, she vowed that "no matter what the outcome of these efforts, we will continue to provide confidential services to teens."

That stand could cost some Planned Parenthood affiliates dearly: federal funding can amount to as much as 90 percent of their budgets. But this only serves to highlight a more general, though critical, question: Given less and less tax money for social and health programs of all kinds, and given more and more strings attached to that money, can organizations like Planned Parenthood survive?

The answer is yes. It may come as a rude shock not only to the New Right but to those who lament Reagan's "budget axe," but even within the Planned Parenthood Federation, where lobbying for ever-increasing tax dollars goes on at all levels of government, some clinics and even whole affiliates are managing to thrive on a combination of patient fees and private contributions, albeit with a small percentage of government funding.

Planned Parenthood is ideal for a case study comparing government-funded versus "self-sustaining" community health care and social service programs. It is a federation of 188 separately incorporated affiliates with more than 700 clinics. A national office enforces a rigorous system of standards and guidelines to ensure that the quality of care is maintained.

The organization is best known for its birth control clinics, where a client is examined by a clinician and then can select the contraceptive method of her choice. The emphasis is on "informed consent"—providing enough information, both favorable and not, to enable the woman to make an intelligent decision. (Some affiliates provide limited services for men, but medical services have historically been aimed almost exclusively at women.) The clinics also offer pregnancy testing and referrals to private physicians, other clinics, adoption agencies, and abortion clinics. Some affiliates provide extensive gynecological care or sterilization surgery for men and women, and some perform abortions.

These various medical services can, under most circumstances, be provided without government subsidies. Those affiliates that operate abortion clinics (about 70 out of 188) do so without any tax subsidies.

Planned Parenthood also provides extensive educational services: workshops, seminars, and classroom presentations; training for ministers, counselors, and others in the helping professions; lectures, pamphlets, and curriculum guides; speakers bureaus; radio and TV guest spots; and information hotlines. The size and breadth of the programs vary widely; all are government-funded to one degree or another.

Tax funding for family planning did not begin until long after the birth control movement was under way. The organizers of the first birth control clinic in 1916 were arrested under the "Comstock laws," passed in New York at the instigation of Anthony Comstock, a vigilant protector of morals in the late 1800s. In addition to outlawing "French postcards" and other pornography, the laws were used to prevent distribution of condoms, diaphragms, and books on contraception. Within a few years of the first clinic opening, however, these laws were overturned, and privately funded clinics were allowed to operate without much in the way of police harassment.

A few Southern states began providing limited contraceptive services to the very poor in the 1930s, and gradually health departments all over the country followed suit, in a modest, discreet way. It wasn't until the mid-1960s that large infusions of tax money became available to family planning providers.

The Office of Economic Opportunity (OEO), part of Lyndon Johnson's War on Poverty, began making grants in 1964. Originally it was assumed, even by Planned Parenthood, that the money would go largely to state and local health departments. But Planned Parenthood affiliates turned out to be among the earliest recipients because, ironically, health departments found it politically difficult to guarantee confidential services to unmarried women and minors, as required by the OEO contracts.

Over the years, a wide variety of programs have come and gone, mostly at the federal level. All state governments provide some funding, as do some local governments. Not surprisingly, the growth of organized family planning services—health departments, some hospitals, Planned Parenthood clinics, and other private community clinics—has paralleled the growth in government funds available. In 1968 about 863,000 women were seen in these programs. By 1979 the number had increased to 4.5 million.

As the number has increased five-fold, so has Planned Parenthood's clientele; it continues to serve about a quarter of the women in these programs. Many affiliates owe their existence to government grants and contracts—federal, state, and local—which can amount to over 90 percent of an affiliate's budget. Private contributions may be as little as 1 percent. Taken as a whole, Planned Parenthood's affiliates in 1981 obtained 48 percent of their aggregate income from government grants and contracts and 25 percent from contributions. People experienced in fund raising for nonprofit groups agree that increased efforts in this area cannot meet cutbacks in government support except over the long haul. In general, it is very costly, both in time and money, to increase the donor base quickly. And in Planned Parenthood's case, federation rules allow affiliates to solicit contributions only from within their own areas, so many do not have access to foundations, corporations, or wealthy individuals who are not already overwhelmed by requests.

It's no wonder, then, that many family planning providers who have been relying on government funding fear what their opponents hope: that cutbacks in appropriations and unacceptable regulations will wipe them out. But an investigation of innovations at several affiliates turns up a different story.

Rocky Mountain Planned Parenthood is by far the largest affiliate. In 1981, it had a budget of $4.8 million and saw 58,000 patients at 34 sites in four states. Three-quarters of the RMPP clinics—those located in urban areas—are today run on a self-sustaining basis. All costs must be covered by patient fees, charged on an income-related scale. The government subsidies and private contributions received by the affiliate are used to provide services in rural areas where the patient load isn't large enough to support a fee-for-service clinic. RMPP started its first self-sustaining clinic in 1972 because, as the executive director, Sherri Tepper, explains, "It didn't matter how much money we got from the government, we couldn't meet the demand. We're located in an area where fundraising isn't great, so we had to make our services as efficient and inexpensive as possible."

Four years ago, RMPP started offering workshops for other affiliates and has published a manual on running clinics without government support (Is There a Clinic after Funding?). There are fees, of course, for both the workshops and the book: "If you provide a service," Tepper believes, "people will pay for it if they want it."

Unlike most Planned Parenthood affiliates, RMPP does not have a community education program reaching out to potential clients, professionals, parents, PTAs, and the like. Affiliates find that such programs don't generate very much in direct revenues, relative to their costs, and must be supported either by government subsidies or by private donations. Tepper prefers to direct RMPP's resources toward clinical services, arguing that education programs are not cost-effective.

That view is shared by Robert Webber, who has been an affiliate executive director and director of the federation's Western Regional Office. "If you're not dealing with people who are going to use the (medical) service immediately, it may not be cost-effective to use taxpayers' money," he admits. But he is confident that "without tax money, the good programs"—which he estimates to be about 25 percent of those now offered by Planned Parenthood—"would survive." He points out that foundations, especially Ford and Scaife-Mellon, "have funded innovative programs in the past, particularly if they are aimed at recruiting patients."

The managers at RMPP's clinics are given considerable discretion, however, and many do offer some community education programs, insofar as their clinic duties and inclinations warrant and if they can provide a favorable cost analysis. RMPP does provide an extensive in-service education program for staff and operates a literature development and publications department that produces revenue for the affiliate as a whole. What has been eliminated from the RMPP model is the paid education staff, who in other affiliates provide community education and at least supervise in-clinic education that ranges from providing information about contraceptives to offering general sexuality counseling.

RMPP's decision not to run a community education program and to keep its in-clinic education fairly limited has drawn some skepticism and a good deal of hostility from people within the federation who argue that too much emphasis can be placed on finances and not enough on providing patients with high-quality care. Many of these people are educators and counselors; they believe strongly that Planned Parenthood has an obligation to provide for clients not only contraceptive and related medical services but also extensive opportunities to discuss and try to solve sexual and social problems.

Dr. Charles Bradley, for example, medical director at the Santa Barbara, California, affiliate, believes that a strong case can be made for including sexuality counseling among the basic services. "Familiarity with sex and with one's own sexual nature and one's partner's sexual nature seems to result in better contraceptive use," he says. "People in stable continuing relationships contracept better. Despite all the emphasis in the media on sex, people—men and women—aren't really comfortable with their bodies and their sexuality."

Barbara Petrich, director of education at the Santa Barbara affiliate, is more concerned with what she sees as the positive social impact of sexuality education. Although she admits that it "hasn't really been documented," she believes "it makes sense at a commonsense level that there is a relationship between child abuse and a poor sexual self-image, drug addiction and a poor sexual self-image, all kinds of asocial behavior." So family planning, she concludes, "should be paid for with tax money because social problems have to be addressed."

Meanwhile, Mark Salo, executive director in San Diego, California, is trying to make his affiliate's education program pay off. Strategies so far include developing and marketing publications directed at professionals such as physicians, social workers, and ministers; providing training for licensed professionals who must complete a certain number of continuing education courses each year (and who are accustomed to paying for those courses); and marketing to other affiliates a combination telephone-system/computer that provides taped messages and information to callers.

Salo believes strongly in competition. He's started marketing Planned Parenthood services to local insurance companies and HMOs (Health Maintenance Organizations—prepaid group medical providers). "Consumers want alternative delivery systems," he says. "Doctors like to talk about free enterprise, but they don't like competition. A variety of delivery systems means that they will compete side-by-side, and that's best for the consumer."

In 1982, the affiliate purchased a building to house its first self-sustaining clinic, which opened in September. Salo thinks that it will be possible to continue to provide services for those in need of "subsidized" care without government funding because there is a growing population of marginal-income people who cannot afford to see a private physician but can afford to pay clinic fees; those fees will help to pay for services for the very poorest of the poor.

Many Planned Parenthood supporters are concerned that self-sustaining clinics may fail to see women who need help and have no other source of care but cannot afford to pay. In September 1981, in response to the first Reagan administration cuts in funding for family planning, federation president Faye Wattleton circulated an internal memo reminding affiliates that "Planned Parenthood provided [its] services long before the first federal dollar was spent, and we must continue to be a reliable resource regardless of fluctuating federal commitments." While encouraging affiliates to seek out cost-saving and revenue-raising innovations, she warned that Planned Parenthood's "survival should not be achieved at the expense of poor and low-income individuals."

The vast majority of self-sustaining clinics, however, are located in metropolitan areas where government-subsidized care is also available, either at another Planned Parenthood clinic or from other providers, such as community clinics or local health departments. Still, for an organization in which one of the underlying principles is equality of care, this is an important issue. And it is in this context that the San Diego affiliate's entrepreneurial strategies and Rocky Mountain's interdependent operation of self-sustaining urban clinics and supported rural clinics are most interesting.

The Eugene, Oregon, affiliate gets no money at all from state or federal agencies. Four years ago they decided to become self-sustaining, and their only government funding these days comes from county revenue sharing, which amounts to about 8 percent of their $200,000 annual budget. But the affiliate figures that in its next fiscal year, even that source of funding will be gone, and several foundations have been successfully approached for contributions. The affiliate is proud of its independence, but as Patty van Meter, director of education, points out, "We have very little safety margin."

The decision not to seek government funding requires a strong commitment on the part of both staff and board. In Eugene's case, that commitment, and the assumption of greater fund-raising responsibilities, was made without serious dissent. And they've found that it's very helpful to be able to say, "We're completely locally funded, and we need your donations to survive."

The staff, meanwhile, was "tremendously relieved to get out from under the paperwork," says van Meter. And they were willing to become more businesslike in their approach, to pay more attention to consumer wants. They also cut back substantially on the use of volunteers.

At first thought, it might seem that any charitable organization trying to survive on little money should welcome the help of unpaid staff. Affiliates agree, however, that volunteers are a mixed blessing. Polly Ashworth, clinic coordinator at the Eugene affiliate, misses "the spirit, commitment, good will, and energy of the volunteers" but admits that the atmosphere is more professional now. A clinic manager at one of Denver's self-sustaining clinics run by RMPP notes that "recruiting, training, and supervising volunteers can be very wearing for a staff." Another Denver-area manager remarks that she is unable to offer high salaries but that one of the rewards she can offer her paid staff is contact with patients—which is also the only task that keeps volunteers over the long haul.

All affiliates do use volunteers in some jobs, however, and many use student interns as well. In Augusta, Georgia, the Junior League provides the nonmedical staff for evening clinics, while medical students receive on-the-job training in all aspects of family planning care through an arrangement with the medical schools. And in Santa Barbara, California, volunteers are used in every program; accounting students even help prepare year-end financial reports.

Arnie Correa, the executive director in Augusta, says he prefers private to government funding. "There's more freedom to maneuver, less uncertainty," he explains. "I know what it costs me to provide a service, and I'm always asking myself how I can do it better and less expensively."

Col. Correa (he's a retired US Army officer with a master's degree in hospital administration) sees his affiliate as self-sustaining, even though government grants and contracts represent about 25 percent of its annual budget. The contraceptive clinics do operate on a fee-for-service basis and are almost entirely self-supporting. If a patient cannot afford to pay, a referral is made to the county health department. Fees are rarely waived, and there is a policy of not sending bills, both because the collection process is expensive and because of a concern for patient confidentiality. Despite the fact that there are a number of providers offering "free" service in the area, the Planned Parenthood has no trouble maintaining its patient load.

The same is true in Albuquerque, New Mexico, which was forced by politics and circumstance to become self-sustaining. For many years the affiliate there received government subsidies through the New Mexico Family Planning Council, an administrative body that allocates state and federal funds to the various family planning providers. In theory, this council and others like it across the country are supposed to prevent wasteful duplication of services and unseemly scrambling for patients and tax money.

In New Mexico, according to Planned Parenthood officials, the council became the arena for a number of power struggles. After attempts to solve problems internally, the affiliate complained directly to the federal and state funding agencies, whereupon the council tried to take over the affiliate. When the dust settled, on July 3, 1980, the affiliate found itself without funding that had amounted to over 90 percent of its budget. Rocky Mountain Planned Parenthood was called in to help, and six days later, the clinic reopened on a self-sustaining basis. Staff size was cut, jobs redefined, and procedures revamped. Two years later, the "retention rate"—the percentage of patients who return for another year—is well within the normal range.

In Concord, California, on the other hand, an experimental switch from a subsidized to a fee-supported clinic was given up. Because the county affiliate to which the clinic belonged has never received federal funding and because the affiliate continued to run several state-subsidized clinics, the switch did not provide much relief from regulations and paperwork. The staff had no problem asking for fees, but when they began turning away over 100 patients a month, referring them to other Planned Parenthood clinics or to other providers, and saw no real hope of recruiting large numbers of patients who were willing to pay, plans were made to again run the clinic on a subsidized basis. The experiment lasted eight months.

Bergitte Berthelsen, director of administration at that affiliate, comments that "with all the problems that come with tax funding, the important point to remember is that subsidies allow wider access to care for people who need it." She admits that if no providers received tax funding, Planned Parenthood would survive and prosper on a combination of patient fees and private contributions. "Having a privately supported clinic improves fund raising, but it's hard to say exactly how or why," she says. "It used to be easier to raise private money when the government wasn't taking care of everybody." Unfortunately, no one knows for sure whether private contributions would be sufficient to take care of all of those who really need help.

Planned Parenthood of Southeast Ohio is gambling that they will. In July 1982 the affiliate announced that it would no longer participate in the federally funded program administered through the Ohio Department of Public Welfare. In a newsletter sent to affiliate supporters, Kay Atkins, the executive director, explained the decision: "State and federal grants are not free money.…Many strings and gigantic stacks of paper continue to cling to [such funds]. We believe patients can better be served by concentrating on providing a service, rather than generating paper documents. This decision challenges us to serve patients well and in a cost-effective manner. It challenges our Board to raise more private dollars. It challenges our patients to pay at least a portion of the costs of their services and supplies."

Many Planned Parenthood clinics have begun using a "self-sustaining model"—a relatively streamlined way of operating—regardless of funding sources. For example, instead of having every new patient sit through a group discussion detailing all methods of birth control, many affiliates now use a short videotape or even pamphlets with brief descriptions of what's available, followed by individual, in-depth review of the method the woman wants to use. Complaints about waiting time have been reduced dramatically.

One of the most valuable aspects of the introduction of fee-supported clinics has been an increased willingness to respond to the desires of clients. As Polly Ashworth of the Eugene affiliate says, "A 16-year-old wants her pills—no information, no exam, just the pills. So we mix what she wants and what's good for her."

What is good for her? Within the family planning profession, there isn't any consensus on what are essential services and what can be described as optional or extra. Some people want to provide only the basics: those medical services directly related to prescribing contraceptives; pregnancy testing, counseling, and referral; and enough education within the clinic structure to ensure informed consent. Others, partly in recognition of the fact that family planning providers are often the primary health care facility and partly because the basics can be fairly boring for staff, want to add services ranging from minor gynecological treatment to sexuality counseling and extensive community education. The mix of services, beyond the basics, varies from clinic to clinic, as does the cost.

Because the costs and benefits of direct medical services are more visible, there is less philosophic debate over their worthiness than is the case with sexuality counseling and community education. Some educators want people to share their view that family planning involves more than the mechanics of contraception and is properly concerned with improving people's self-image, sexuality, and relationships. In contrast, Robert Webber, the former affiliate and regional director, contends that "billions have been poured into programs that do more to meet the needs of the employees rather than meeting the needs of the clients." And many of those programs, he says, are the ones that "have dealt with emotions and feelings rather than imparting information in ways that can be used by the client."

Fortunately, many of the counseling and education programs could easily generate enough revenues to cover their costs: they attract mostly middle-class, adult clients. The list is almost endless:

professional training
talking to kids about sex
pregnancy over 30
premenopause support groups
herpes support groups
women's support groups
men's support groups
parent/child workshops
sex and disability
couples counseling
relationship counseling
parent counseling
natural childbirth classes
single-parent workshops
workshops for ministers

Regardless of the level of government funding, these programs can continue if there is a demand for them within the community.

Most Planned Parenthood affiliates also provide speakers for community groups and schools, and family planning professionals are unanimously agreed that education, particularly when it's aimed at providing factual information, is a necessity: over 50 percent of unplanned pregnancies in women under 20 occur in the first six months of sexual activity when she is using no method of birth control at all. The money needed to continue this community service would undoubtedly come from private contributions if tax money were not available, given the excellent relationships Planned Parenthood affiliates have developed with the schools and with community groups such as Parents Without Partners and Rotary Clubs.

Other programs would be less likely to survive without tax support, at least in their present forms. One example is a Male Involvement project at the Santa Barbara, California, affiliate. By educating men about their bodies, teaching them how to share responsibility for sex and birth control, and helping them learn how to cope with the changing world, the project is aimed at making sure that "every child is wanted by both parents." But, "if it weren't for public funding," says the project coordinator, "I don't think people would bother with male projects. Men are in charge of determining where the money goes, and men think they already know all about sex."

Of course, the New Right, too, has come up with programs that couldn't survive without tax funding. Sen. Jeremiah Denton (R–Ala.) has finally managed to get authorization for his Adolescent Family Life Bill, which was funded when Congress overrode President Reagan's veto of the 1982 Supplemental Appropriations bill, to the tune of $10.3 million for this fiscal year. This demonstration project will create so-called chastity centers that will provide, in addition to services for pregnant teens, counseling for teens on the virtues of abstaining from sexual relations. Naturally, in keeping with Senator Denton's desire to uphold traditional family values, teenagers seeking help from the chastity centers will have to have their parents' consent.

Government subsidies for health care and social services, including family planning, are not going to disappear overnight. The dollars will continue to get scarcer; the strings will continue to pull tighter. Many organizations will be taking a hard look at the costs associated with tax-funded programs. A few will decide they can do their jobs without government "help."

Ruth Green is the executive director of Planned Parenthood of Southern Arizona, an affiliate that has both subsidized and self-sustaining clinics. She is so highly respected that an award is given in her name each year to the most outstanding affiliate director. "The funding crisis," she says, can be regarded as "a threat or an opportunity." She counsels affiliates to "reduce the whole-body fat rather than lop off arms and legs. Production is important: business thinks about the bottom line and so should we. We must recapture costs. Someone must pay for quality."

The overwhelmingly positive experiences of the Planned Parenthood affiliates that have experimented with privately supported clinics proves that people will pay for quality and suggests that they will do so in large enough numbers to help those who can't. The roots of all social service programs are in voluntary community support. In the specific case of Planned Parenthood, opponents have been betting on the hope that if government support is withdrawn, the organization will collapse. The self-sustaining clinics offer an alternative scenario and give encouragement to health care and social service organizations in general: if the program meets a real need, real people will support it—voluntarily.

L.A. Villadsen has an M.B.A. in community organization administration. This article is a project of the Reason Foundation Investigative Journalism Fund.

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