Business Plan House Calls Docs - lewandowski67.weebly.com€¦ · Web viewHouse Calls Docs propose...

Business Plan House Calls Docs

Christine Lewandowski

Healthcare mangement Siena Heights University

Table of Contents

Executive Summary 2

Program Overview 3-4

Market Analysis 4-8

Physician Analysis 8-9

SWOT Analysis 9-10

Program Design 11-12

Financial Analysis 12-16

Service Line Strategies 16-17

Market Initiatives 17-20

Implementation and Monitoring of the Plan 20-21

Implications 22

Appendix 23-25

1


Executive Summary

The community has identified a significant need for transitional care. This is evident in

the readmission rates for seniors in our community. Readmissions have been related to a lack of

coordination of care, lack of communication, lack of support and access to primary care, adverse

drug events, and a lack of transportation for post-acute care. There are many reasons this has

created the perfect storm for poor patient outcomes. Under the new CMS payment models,

including bundling payments and value-based purchasing alignment, quality of care needs to be

the forefront agenda for all providers.

House Calls Docs propose to provide a solution to the lack of access to care for the senior

community of Orange, Osceola, and Seminole counties in Florida. Home based medical care will

be provided post-discharge from an acute care setting. In addition, chronic disease management

will be closely monitored to ensure barriers are removed from better outcomes and achieve goals

of self-management by means of educating patients.

The market for these services include urban and rural populations of Medicare

beneficiaries. The partnership with Florida Hospital Orlando and its Florida Hospital Medical

Group will allow for greater access to a referral base, HIT system, and opportunity to improve

the community’s health and outcomes. Addressing the lack of coordination in the care continuum

by bringing the care to the patient in their home setting (home, skilled nursing facility, or assisted

living facility) will allow for patient-centered care and closely monitor chronic diseases and

prevent them from necessitating acute care. This will benefit House Calls Docs and Florida

Hospital Orlando mutually by improving quality and reducing readmission rates.

2


Program Overview

Mission: The mission of House Calls Docs is to treat the senior population manage chronic

conditions and improve better outcomes by treating the patient’s whole person, body, mind, and

spirit.

The service line objectives include partnering with the community to create a transitional care

model and relationships to further positively impact the communication across the care

continuum. We will share best practices and successes with the community to improve the health

of the population and reduce medical errors.

Service Line Objectives

To provide chronic care management to the community

To reduce unnecessary readmissions to acute care by providing transitional care

management

To provide convenience to patients who require or request home care

To provide preventative treatment

To provide high quality care and remove barriers of patients traveling to appointments

Scope of Service

Primary care medicine

Wellness visits

New illness exams

Follow-up care from discharge

Referral for specialty care

Medication management

3


Mission and strategic goals are aligned. Florida Hospital has performed a community needs

assessment and our goals are aligned in addressing health issues in the community. The focus

will be on the most vulnerable population who have limited access to healthcare. The community

has a high prevalence for heart disease, utilization of mental health services, and limited access

to care. Our goals are aligned with Florida Hospital Orlando’s to address these issues. Our

missions are in line to treat the whole person- mind, body, and spirit.

Market Analysis

Market share

Utilization volume, both current and projected

Current volumes were not available at this time. Projected volumes are 22,700 for initial year

and 35,800 for subsequent years two through five. According to the federal labor bureau of

statistics, healthcare is projected to be a rapidly growing market in response to the aging baby

boomer population. There are currently three direct competitors in mobile physician care. There

are hundreds of family and internal medicine practitioners; however, they don’t deliver the

unique care we provide.

Competitor Profile

In the factoring of the competition, the primary care market and home health agencies available

to the community were counted. In this geographic are, there are a total of sixty-two home health

agencies. There are innumerable amount of primary care physicians. However, there are only

three that provide mobile physician care.

Performance Metrics

4


Orlando Health is the biggest competitor health service organization in the market area. The

readmission rates are lower at 19.4% compared to Florida Hospital Orlando at 21.9%. Our

performance will be measured by the ability to impact readmission rates for Florida Hospital

Orlando and PQRS measures.

Defined service area

Orange, Osceola, and Seminole counties in Florida.

Orange County:

Population Age 65+: 117,189

Medicare Beneficiaries: 110, 919

Osceola County:


Medicare Beneficiaries: 29,656

Seminole County:


Medicare Beneficiaries: 50,677

Population demographics:

Orange County

o Population of people 65+ under poverty level: 10.6%

o Median Income: $47,581

o Disability Rate: 35.5%

5


o Race:

White: 45.1%

Hispanic: 27.6%

African American: 19.7%

Other: 7.6%

Osceola County



o Disability Rate: 41.7%

o Race:

White: 38.9%

Hispanic: 46.8%


Other: 5%

Seminole County



o Disability Rate: 34%

o Race:

White: 65.6%

Hispanic: 17.8%


Other: 5.9%

6


In this region, the readmission data available at Hospital Compare is:

Hospital Compare data is more up to data compared to CMS data. CMS data, however, is

matured and will not adjust.

According to CMS data from CY 2014 for readmission data

7


Of those Medicare beneficiaries that were readmitted, only 66% had a follow-up appointment

with a primary care physician. Of those will a follow-up, 46.8% were subsequently still

readmitted. 92.5% of those patients were readmitted within 1-14 days. 7.5% of those within 15-

30 days.

Defined service area

Orange, Osceola, and Seminole Counties, Florida

8


Nation Florida Region Florida Hospital Orlando Orlando Health0

5

10

15

20

25

Readmission Data CY 2014

Readmission Data CY 2014

Zip Codes for Orange, Osceola, and Seminole Counties33848 34770 32751 32814 3471534770 34772 32801 32825 3474734771 32730 32807 32831 3474432732 32750 32817 34711 3474532746 32803 32824 34753 3270732804 32806 32832 34743 3270832805 32818 32839 34746 3277932819 32822 34756 32703 3278932820 32833 34742 32709 3281032835 32837 34758 32766 3281132836 34761 32701 32792 3282834786 34741 32712 32809 3282934787 34769 32765 32812 3473434739 34773 32798 32827 34736

32714 32808 32830

Physician Analysis

Medical Staff Age Assessment

The number of retiring physicians in the market exceed the number of new entering physicians.

This demonstrates a physician shortage, especially in primary care.

Recruitment recommendations

It is recommended to recruit physicians who are committed to delivering a model of care that

focuses on the entire patient, not just a visit. There must be a commitment to managing the

seniors in our community and preventing unnecessary admission and readmission to the acute

care setting. Recruitment efforts should be made to capitalize on physicians who have

established a knowledge and relationship with post-acute care providers and understand how to

manage the transitions of care.

SWOT Analysis

9


Strengths = Partnership with Florida Hospital and Physician Medical Group. Few competitors in

mobile physician care.

Weaknesses = High readmission rates.

Opportunities = Only 2 competitors in direct service line of home physician care, opportunity to

reduce readmission rates with transitional care model.

Threats = Many competitors in primary care available as alternatives to care, ACOs.

10


Program Design

Volume projections

Year 1= 22,700

Year 2-5= 35,800

Services provided

Primary Care medicine

Wellness visits

New illness exams

Follow-up care

11

Environmental Analysis


Referral for specialty care

Medication management

Capacity and space allocation

2,500 sqft office space to be leased centrally in Orlando. There is also the capacity to utilize the

EMR/EHR framework Florida Hospital Orlando currently operates. The benefit from this is to be

able to view EMR data from Orlando Health too.

Facility/Equipment needs

The facility will need office equipment, for example, desk, computers, printers, EMR system

(Cerner), chairs, etc. Also to be purchased for home care: portable EKG machine, nebulizer,

portable x-ray and ultrasound machine, and a Doppler machine.

Management and personnel

12

Florida Hospital Orlando

Medical Director Florida Hospital Medical Group Administrator

Physicians

SLP PT

MSW NP

RN HHA


Financial Analysis

Pursuant to a request from Florida Hospital Medical Group and Florida Hospital Orlando,

an analysis has been completed to provide mobile primary care services including transitional

care models for Florida Hospital Orlando.

BACKGROUND

Currently, Florida Hospital Orlando has a high rate of readmissions. This has been

determined by CMS data to be related to a lack of coordination of care following the patients’

discharge. Patients are typically discharged to home, skilled nursing facilities, or home health

agencies. The readmission rates are above Florida averages and above national averages.

According to payment reforms, Florida Hospital Orlando will face penalties for these rates if

they do not improve. This has created a need to reach the patients discharged to the community

at their convenience. Many patients do not have the ability due to socioeconomic reasons and

disabilities to get to a physician office. This provides an opportunity for House Calls Docs to

partner with Florida Medical Group to provide in-house services to those homebound Medicare

fee-for-service (FFS) beneficiaries. This partnership will create a transitional care model to

manage chronic conditions to reduce the instances of necessity for patients to return to the acute

care setting. This community, Orange, Seminole, and Osceola counties have been identified as a

need for a coordination of care services to improve the senior patient outcomes and reduce

readmission rates. With the ever-increasing demand for improved quality of care, it has become

apparent that Florida Hospital Orlando could expand its primary care and chronic conditions

management services. Volume forecasts to support this were supplied by Florida Hospital

Medical Group.

13


The total project cost is $ 1,379,517.

FACTS AND ASSUMPTIONS

1. The initial investment of $ 1,300,000 consists of obtaining a leased office space for 2,500

square feet for $24,000 annually. There will be business equipment expenses estimated at

$50,000. The capital expenses for Ultrasound, X-ray, EKG, and Doppler machines is estimated

at$ 329,185. Medical equipment is estimated at $40,000 for miscellaneous supplies annually.

2. Florida Hospital Medical Group, provided volume estimates based on geographic

demographics. These estimates include a 3% increase each year. The projected volume for year 1

is 22,700 services provided.

3. The estimated gross revenue per visit is $250, Supplies are estimated at $5.00 per patient, for a

net revenue of $245 per patient. While gross and net revenue per patient were kept constant,

supply expense was increased by 3% each year to allow for inflation.

4. Salary expenses were provided by salary.com to account for fair market value for the specific

market area. The salary expense consists of 11.0 FTE. Salary expense was increased by 3% each

year to match the procedural growth rate.

5. Depreciation expenses for Ultrasound (5years), EKG (7 years), and Doppler (5 years)

equipment were based on a useful life chart provided by Northwestern University (Accounting

Services. (n.d.).

6. Rent, utilities and related expenses were calculated at $24,000 annually.

7. The indirect expenses are estimated at $10,000 per year to account for expenses involving

travel and administrative costs that are not directly related to patient care.

14


FINDINGS AND RECOMMENDATIONS

The attached schedule was completed based on the above Facts and Assumptions.

With an initial investment of $1,300,000, the project provides a positive Net Present Value

(NPV) of $ 23,825,281with an Internal Rate of Return (IRR) of 480% and a Payback. Period of

less than one year. This rate of return represents an acceptable return according to corporate

guidelines. As such, this project is financially feasible.

NPV @ 10% $ 23,825,281

IRR of 480%

Payback (yrs) > 1 year

The expected financial impact for House Calls Docs and Florida Hospital Orlando and Medical

Group is expected to be extremely profitable.

15


Assumptions used on financials

16


The assumptions used were that there would be three physicians, three nurse

practitioners, social worker, speech language pathologist, home health aides, and two registered

nurses to be able to care for patients at initial estimate of eight visits per day. The initial year

would be a growing of the referral base from Florida Hospital Medical Group and Florida

Hospital Orlando. That patient base would grow and keep steady through year five. A volume of

22,700 for the initial year and 35,800 for following years. It is estimated that a Medicare

payment for each patient visit is $250 with $5 in supplies costs. Indirect costs are related to travel

and administrative costs. Insurance estimates were based on an online search. Rent is estimated

at $2,000 per month based on going rates for the community and square footage. Maintenance is

not expected to be needed in the first year and minimally the four years following. Florida

Hospital has placed in the joint-venture contract of $50,000 for House Calls Docs to receive if

successfully impacting readmission rates of 4% or greater each year. Depreciation of capital

equipment costs have been spread over the five years. Salaries were estimated using an online

resource for market area rates. Changes in volume will impact the financial standing of House

Calls Docs minimally and the risk is low. At 10,000 services per year, the company will still

remain profitable. The visit amount is an estimate based on all services available and the average

rate of disability for the community at approximately 35%.

Service Line Strategies

The strategies directly correlate with the plan’s objective(s) and those items identified in

the SWOT analysis. A strategic focus should remain on quality of care, consumer satisfaction,

volume, utilization management and cost control. “It has been widely argued that geographic

markets for physician services are relatively local and segmented by specialty” (Kleiner, Sam,

Lyons, Sean, White, and William, 2012, p. 4). The mobility of the practice will greater expand

17


the advantages of the primary care market in potential to reaching a greater span. In turn, this

business has higher potential for growth by not be limited to a close proximity of geographic

location.

Marketing Initiatives

Target market and demand forecasts are optimistic with a higher than average population

ages 65 and over and 35% disability rate. The brand name will be owned by Florida Hospital

Orlando and House Calls Docs respectively. Marketing will be focused on communicating to the

customers that our focus is on patient satisfaction and quality. It is by mindful relationship

building that we intend to get this message out. Communicating with the community through

coalitions and patients, we will demonstrate our commitment to quality.

Marketing will be facilitated by Florida Hospital Orlando on behalf of Florida Hospital

Medical Group and House Calls Docs. The target market is to seniors in the Orange, Seminole,

and Osceola counties. Marketing will be facilitated at outreach communities meetings, aging

adult community service organizations, and at the time of discharge from Florida Hospital

Orlando.

18


Florida Hospital Orlando was ranked number one in Florida and the Orlando region.

According to Becker’s Hospital Review in 2012, the market share included 157,585 outpatients,

44, 099 inpatients, and 59, 961 Emergency room visits. In Florida, 46.4% of hospital discharges

in the 60 + population accounted for in 2013. In Florida, 53.9% of total healthcare charges were

to Medicare. The trends in readmissions have been negative. Despite efforts to improve the

coordination of care, readmission rates have been trending upwards.

Pricing and price sensitivity

The proposed prices are estimated. It was not possible to gain actual pricing strategy

based on information available to the public. Medicare only provides a formula for basing

pricing schedules on. Being that we don’t have an actual physician provider number and analysis

of the history of costs to provide care, the geographically appropriate factor in the equation is the

only information available. That information is not quantifiable at this point. Further consultation

with Florida Hospital Orlando and medical group will be necessary to access Medicare’s fee

schedule.

19


There is a strong referral base in the community by partnering with Florida Hospital

Orlando. They possess a high market presence and are one of the largest providers in the state of

Florida. The partnership to reduce readmissions is based on the readmission rate the hospital had

from 2014 CMS data. Osceola County is at 23.9%, Orange County is at 20.92%. Seminole

county is rural and the referral base there is included in Orange counties readmission rate.

Promotion and advertising

The proposed business venture will be marketed to the target population from referral

from Florida Hospital Orlando, referrals from Florida Hospital Medical Group for patients who

are unable to travel to appointments. Marketing will also be advertised through word of mouth

through a professional network at the community coalitions for organizations wishing to reduce

their readmission rates with a transitional care model.

Implementation Plan

The Medical Director will be responsible for the onboarding of the physicians and Nurse

practitioners. The Administrator will be on boarded with Florida Hospital Orlando. The manuals

of policies and procedures will be created for accreditation by the Medical Director. The

Administrator will facilitated accreditation and contracts with lab and physical therapy with

Florida Hospital Orlando. The Administrator will research and contract with a pharmacy service

to utilize. Currently, Florida Hospital Orlando utilizes Walgreens. Physicians and NP will meet

with the case management team at the hospital to discuss appropriate referrals. Accreditation will

be obtained and operations will start January 4th. The physicians will see patients in home and the

NP and/or RN will follow up with the patient as appropriate. A case manager will also be

20


assigned the patient for instances of patient transfer between settings to facilitate smooth

coordination.

Evaluation Criteria

The project will be evaluated on its impact on reducing readmissions to Florida Hospital

Orlando, the physicians, and the post- acute care providers with whom patients are discharged to.

The success of the business will also be reflected in a minimum of 5% growth in revenue.

Evaluation of Medicare reimbursement penalties and reimbursement rates based on quality

metrics reported will also determine if the transitional care model is successful and the care

providers are providing high quality care. The estimated workload is eight patient encounters a

day at minimum. This may be exceeded for visits to skilled nursing facilities in which providers

are able to care for patients in a group setting. The Medical Director will be responsible for

monitoring the quality outputs and the administrator of House Calls Docs will monitor the

readmission data and it will be compared to CMS data for its completeness and accuracy.

Exit Strategy

If the proposed joint venture is not successful in mutually reaching goals for Florida

Hospital Orlando, Florida Hospital Medical Group, and House Calls Docs, then the assets will be

forfeited to Florida Hospital Orlando. Contracts for laboratory utilization and physical therapy

services will be terminated. The cost for terminating will include sunk costs of capital

equipment, marketing, and training.

Implementation and Monitoring of Plan

This business plan will be implemented by the Medical Director of Florida Hospital

Medical Group in partnership with the three physicians of House Calls Docs. Monitoring of

21


Quality metrics and business appropriateness will be overseen by the Medical Director of Florida

Hospital Medical Group. Quality measures will be submitted to CMS. The business plan

implementation will be monitored on a quarterly basis for financial stability and quality.

Physician quality measures will be assessed monthly. Readmission data will be provided per

Medicare claims from Florida Hospital Orlando and CMS. Volumes will be assessed according

to administrator records, in addition, to claims data. Employed will be three primary care

physicians, three nurse practitioners, two registered nurses, and a case manager to coordinate the

care continuum, an administrator to facilitate appropriate practices in line with regulations and

appropriate billing, and a social worker to manage patients’ needs to adhere to management of

chronic illness.

The health information technology system that will be utilized will be jointly used with

Florida Hospital Orlando, Cerner. This will be used in conjunction with a business enterprise

system to link financial, clinical, and operational data. Electronic medical records can be

accessed from Florida hospital Orlando and Orlando Health due to a partnership.

Physician referrals will be from Florida Hospital Orlando upon discharge. Florida

Hospital Medical Group will refer patients who request home care. Referrals also can be

accepted from other systems in the community, such as, Orlando Health. Patient volume is

estimated to start for the first year at 22,700 patient services and grow to 35,800 annually once

the relationships have been established. It is estimated that the capacity for provider to reach

eight patients per day and more if providing care in a group setting, i.e., skilled nursing facility.

22


Implications

Impact of Plan

The goal of this plan is to partner with Florida Hospital Orlando and Florida Hospital Medical

Group in order to address a community need of managing chronic conditions and reducing

unnecessary readmissions to the acute care setting. It is expected to provide high quality care in

the convenience of the patients’ home setting. It is also expected to improve patient follow up

care from the acute care setting by eliminating the barriers of traveling.

“This analysis of market-level Medicare spending data between 1995 and 2005 reveals that the

proportion of PCPs is not associated with spending growth” (

Risk Factors

There is inherent risk in providing a new model of care not experienced by the community for

quite some time. There are risks that the Florida Hospital Physician Group may interpret this

service as a threat to their current market share. In fact, it is not a threat, it is a partnership to

improve the community’s care and ensure patient’s follow up to manage their chronic condition

without barriers.

23


Appendix

References

2012-2015 Orange County Community Health Improvement Plan (CHIP). (2009). Retrieved

from http://www.orchd.com/documents/chip.pdf

Accounting Services. (n.d.). Retrieved from http://www.northwestern.edu/controller/accounting-

services/equipment-inventory/useful-lives.html

Brown, B. (2015, March 26). Best Way to Run a Hospital Readmissions Reduction Program.

Retrieved from https://www.healthcatalyst.com/healthcare-data-warehouse-hospital-

readmissions-reduction

Chernew, M., Sabik, L., Chandra, A., & Newhouse, J. (2009). Would Having More Primary Care

Doctors Cut Health Spending Growth? Health Affairs, 28(5), 1327-1335.

doi:10.1377/hlthaff.28.5.1327

Current US Inflation Rates: 2005-2015. (2008, July 22). Retrieved from

http://www.usinflationcalculator.com/inflation/current-inflation-rates/

Evans, M. (2013). ACOs could hurt competition, Health Affairs authors say. Retrieved from

http://www.modernhealthcare.com/article/20130806/BLOG/308069996

Florida Cunningham Group. (n.d.). Retrieved from

http://www.cunninghamgroupins.com/historic-medical-malpractice-insurance-rates/

florida/

Florida Hospital Orlando | 100 Great Hospitals in America 2015. (2015). Retrieved from

http://www.beckershospitalreview.com/100-great-hospitals-2015/florida-hospital-

orlando-15.html

24


GE MAC 1200 Resting EKG Machine (Refurbished). (n.d.). Retrieved from

http://discountcardiology.com/GE-MAC-1200-Resting-EKG-Machine.html?

gclid=CPXYl_P928gCFY8dgQodrHkBJg

Hospital Discharge Summary, 2013. (2014). Retrieved from

https://floridahealthfinderstore.blob.core.windows.net/documents/researchers/QuickStat/

documents/HospitalDischargeQuickSummary2013.pdf

Kleiner, Sam and Lyons, Sean and White, William, 2012, “Provider Concentration in Markets

for Physician Services for Patients with Traditional Medicare” Health Management,

Policy and Innovation, 1(1) 3-18.

Our Mission. (n.d.). Retrieved from https://www.floridahospital.com

Nelson, O. N. (2012). Relationship quality: Upshot of mindfulness-based marketing strategy in

small organizations. The International Journal of Quality & Reliability Management,

29(6), 626-641. doi:http://dx.doi.org/10.1108/02656711211245638

Roney, K. (2012). 10 Things to Know About Florida Hospital Orlando. Retrieved from

http://www.beckershospitalreview.com/hospital-profile/10-things-to-know-about-florida-

hospital-orlando.html

Salary Wizard- Do you know what you're worth? (2015). Retrieved from

http://swz.salary.com/SalaryWizard/Case-Management-Director-Salary-Details-32709-

Christmas-FL.aspx?&fromevent=swz.jobdetails.freepop

SonoScape A6 Review. (n.d.). Retrieved from http://www.providianmedical.com/ultrasound-

machines/sonoscape/sonoscape-a6/

25


Your Geography Selections. (n.d.). Retrieved from

http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?src=bkmk

26


Business Plan House Calls Docs - lewandowski67.weebly.com€¦ · Web viewHouse Calls Docs propose...

Documents

Transcript of Business Plan House Calls Docs - lewandowski67.weebly.com€¦ · Web viewHouse Calls Docs propose...