Expenses
Healthy Horizons will be eliminating non-guideline directed lab testing to decrease expenses. This will allow the clinic to restructure and provide additional wellness tracks to employees. We do not account for pharmacists’ salaries because they are currently an expense of Butler University. We are hoping to expand services and add an additional FTE. The following are expenses of each visit type.
Per the ADA, A1c screening for healthy adults should begin at age 45. If the results are normal, repeat testing should be completed every 3 years1. Lipid testing for healthy adults 20 years and older should be completed every 4-6 years. At the age of 40, testing also depends on ASCVD risk2. Patients who are not in need of either of these screenings, will have a visit cost of $1.10 (cost of health portfolio).
Cost Per Appointment Types:
Current Costs of Medical Supplies Prior to Restructuring:
Cost per person would be expected to decrease due to the initiating of guideline directed testing.
All charts above are from written communication by Dr. Allison Walton, PharmD, BCPS on November 4, 2019.
Income
- $40,000 per year is given to the clinic to cover operating costs such as medical supplies and giveaways.
Expected Reimbursement
- Based on the nature of a preventative wellness clinic provided by an employer, reimbursement is not expected.
Cost Avoidance
Due to the fact that this clinic will not generate revenue, cost avoidance is an important consideration. According to Dr. Sheena Sanders, Pharm.D., BCPS, written communications on November 15, 2019, Healthy Horizons completed 115 new patient annual wellness consults and 399 returning patient wellness consults for a total of 514 patients in 2018. Based on the cost of annual wellness consults outlined in the tables above, the clinic spent between $11,708.92 and $13,384.56 depending on how many patients were on a statin.
The following is an estimate on cost avoidance. Exact numbers of patients on a statin and patients with diabetes is not known, so the following represents the maximum cost avoidance.
For Returning Patients:
- Responsible for $9,089.22 – $10,389.96 of the total wellness visit cost in 2018.
- Year 2 = 1st year returning
Cost Savings
Prior to the restructuring of Healthy Horizons, employees were given a total of $250 as an incentive or using the service. We are proposing to give employees $50 for an initial wellness visit and an additional $100 upon completion of their chosen track. Based on 2018 data, a total of 514 patients used this service. Assuming all 514 patients completed a track, a total of $128,500 was spent on incentives. Butler University is responsible for paying incentives. By implementing the new incentive amounts, each employee will receive $150 assuming they complete a track. Butler University would now be responsible for paying a total of $77,100, saving $51,400. The cost savings from incentives could be used for an additional FTE for the clinic to hire an additional pharmacist. This would increase accessibility to employees and allow scheduling time to be shorter than 6 weeks in advance of appointments.
Total Revenue
Assuming 399 patients return in 2020 and there are 115 new patients, the clinic would save a maximum of $8,650.32 – $9,951.06. The additional funds can then be used to implement the new wellness tracks.
Citations
- American Diabetes Association. Standards of medical care in diabetes-2019. Diabetes Care. 2019;42(Suppl 1):s1-s193. https://doi.org/10.2337/dc19-Sint01
- How To Get Your Cholesterol Tested. American Heart Association. https://www.heart.org/en/health-topics/cholesterol/how-to-get-your-cholesterol-tested. March 22, 2019. Accessed November 17, 2019.