Expense Projections:
The Eskenazi Health Pedigo Clinic has a fully operational work space, exam room, and staff (including all necessary equipment) necessary to allow an Ambulatory Care Pharmacist to operate. We would expect this to reduce start-up costs to a near-zero amount.
Income:
We expect that this position will pay for ½ FTE of a new-hire Ambulatory Care Pharmacist. We estimate the cost of a new pharmacist to be $125,000; meaning a $62,500 cost for the Pedigo Clinic is to be expected. We estimate the pharmacist to be available in clinic two full days per week, with an estimated 20 total patient visits. We anticipate 5-10 of these visits to be billable, shared-provider visits with a physician, and the remainder to be pharmacist visits under the proper collaborative practice agreement.
Due to the Pedigo clinic’s standing as a federally qualified health center, pharmacists in this clinic will not be seen as providers and will therefore be unable to bill for individual visits. However, the shared provider visits, along with the extra visits the physician will be able to schedule with a pharmacist reducing their workload, will be enough to validate the cost of a pharmacist at this clinic.
Revenue:
The direct source of revenue with the hiring of an Ambulatory Care Pharmacist will come from shared visits with the pharmacist and the physician on site. For this proposal, we have prepared separate models for the revenue generated from 5 shared visits per week (one afternoon of full-day), as well as another model for 10 shared visits per week (afternoon on both full days per week). With Pedigo’s standing as an FQHC, we anticipate a reimbursement rate of $304 per shared visit when billing at a Level 3 or 4, and that will be the value used in our revenue model.
*Factoring in a 20% no-show rate, our models will factor in 4 and 8 total shared visits per week when predicting revenue
Another source of income that we predict, but cannot necessarily quantify at this time, is an increase in medications filled by patients who meet with the ambulatory care pharmacist in the clinic. We predict that an increase in adherence will lead to increased medications filled at Eskenazi Pharmacies, which will further drive revenue.
Expected Revenue per Week
Expected Reimbursement/week (4 shared visits/week): $304 x 4 visits = $1,216/week
Expected Reimbursement/week (8 shared visits/week): $304 x 8 visits = $2,432/week
Expected Revenue per Year
Expected Reimbursement/year (4 shared visits/week): $1,216/week x 52 = $63,232
Expected Reimbursement/year (8 shared visits/week): $2,432/week x 52 = $126,464
Cost Avoidance:
According to a retrospective observational study conducted in the Advocate Healthcare Network, this quicker follow-up time will lead to a statistically significant reduction in readmission rates, and therefore lead to cost savings. With the addition of an ambulatory care pharmacist, we would expect the additional potential visits per year to increase by approximately 830 (factoring in 16 pharmacist visits per week after a 20% no show rate, spread out over 52 weeks per year). This number is likely on the low end, as this does not factor in additional patients the physician will be able to see utilizing the shared-visit model. With this increase in visits, we would thus expect the time to next visit metric to decrease, as well as the time it would take for a patient to be seen after being discharged from a hospital.
Additionally, the Pedigo Clinic’s standing as an FQHC, which allows for additional grant funding via the HRSA as well as additional reimbursements through the Centers for Medicare and Medicaid. In accordance with FQHC standards, facilities are required to report on certain measurable standards, including smoking status, appropriate lipid lowering therapy, and other measurable lab data. Studies indicate that meeting with a clinical pharmacist will increase patient outcomes, lead to an increase in ADA goals met, and result in statistically significant outcomes in A1C, blood pressure, and lipid levels. Based on this study, along with mounting evidence to support it, the addition of an ambulatory care clinical pharmacist will be beneficial in remaining in accordance with FQHC measures.
Net Revenue for Year 1:
Using 4 visits/week model:
$63,232 – $62,500 = $732
Using 8 visits/week:
$126,464 – $62,500 = $63,964
Break Even Analysis:
Using our rate of $304/shared visit, the Pedigo Clinic would become profitable after the 205th shared visit of the calendar year. To break even by year’s end, the clinic would need to average 3.95 shared visits per week. This lines up with our projected net revenue for Year 1, which has the clinic profitable using both the 4 visit per week as well as the 8 visit per week model.
Citations:
Cripps, R. J., Gourley, E. S., Johnson, W., Cassidy, R., Morgan, T. C., Venugopal, D., & McFarland, M. S. (2011). An Evaluation of Diabetes-Related Measures of Control After 6 Months of Clinical Pharmacy Specialist Intervention. Journal of Pharmacy Practice, 24(3), 332–338.https://doi.org/10.1177/0897190010392235
TA Walroth, oral communication, October 28, 2019.
Tong L, Arnold T, Yang J, Tian X, Erdmann C, Esposito T. The association between outpatient follow-up visits and all-cause non-elective 30-day readmissions: A retrospective observational cohort study. PLoS One. 2018;13(7):e0200691. Published 2018 Jul 17. doi:10.1371/journal.pone.0200691