Expenses
The Franciscan Health Type II Diabetes Ambulatory Care Clinic will be adding additional diabetes education and testing provided by two already employed pharmacists in the system. Since this is only a pilot program, with pharmacists shifting where they spend their hours at work, we do not account for the pharmacists’ salaries, since there is not one employed just for the clinic. However, we can expect the following startup costs for the pharmacist to start working at the clinic.
| Startup Expenses |
|
| Computer Desk with chair | $750 |
| Telephone | $100 |
| Blood Glucose Monitor (OneTouch Ultra) | $100 |
| A1c Monitor (DCA Vantage analyzer) | $3,500 |
| Wall mounted sphygmomanometer | $100 |
| Printer/Fax Machine | $200 |
| Miscellaneous Office supplies | $150 |
| Marketing materials | $1000 |
| Total Startup Expenses (one-time expenses) | $5,900 |
In addition to the startup costs the clinic expects, we will see a large amount of monthly expenses mostly due to the high costs of Hemoglobin A1c testing cartridges, blood glucose testing strips, and handing out a 3-month supply of blood glucose logs to each patient.
| Recurrent Expenses |
|
| Monthly medical supplies* | $1,200 |
| Monthly office supplies | $200 |
| Total Monthly expenses | $1,400 |
*Recurrent medical supplies: Blood glucose test strips, gloves, A1c test cartridges, product demos, etc. **Recurrent office supplies: Printer paper, printer toner, pens, staples, post-it notes, folders, and materials for pamphlets to hand out to patients.
Total Expenses/year
$5,900 startup expense + ($1,400 monthly expense x 12 months/year) = $22,700/ year
Income
The pharmacists working in the clinic have a total availability to meet with up to 32 patients per a week with how often they are working and the time available for clinic rooms, however, the facility has roughly a 25% no-show rate, so all income measures will be based on 24 patients per a week, instead of the possible 32 patients.
Expected Reimbursement/month
$96.25 expected reimbursement*/visit x 96 visits/ month = $9,240 / month
Expected Reimbursement/year
$9,240 /month x 12 month/year= $110,880 /year
*Since we are located on the first floor of the hospital, we will be billing for an outpatient hospital clinic (G0463), which covers any level visit and averages a $96.25 reimbursement from Medicare.
In addition to these estimates for income, Franciscan is an Accountable Care Organization (ACO), so they can expect increase income based on meeting their ACO goals. The ACO goals of the clinic include:
– ACO-1 Getting timely care
– ACO-2 How well the provider communicates
– ACO-3 Rating of the provider
– ACO-27 DM hemoglobin A1c control
– ACO- 41 DM eye exams
Cost Savings
Based on the Diabetes Ten-City Challenge study, which incorporated a pharmacist into the patient’s diabetes care, the average cost savings per an individual patient working with a pharmacist to achieve the patient’s diabetic goals was $1079.00.
Cost Saving/month
96 patients/month x $1079.00 savings/patient = $103,584 in savings/month
Cost Saving/year
$103,584 savings/month x 12 months/year = $1,243,008 cost saving/year
Total Revenue for 1 year
Total Revenue = (Cost Savings + Income) – (Startup Expenses + (12 x monthly expenses))
($1,243,008 + $110,880) – ($5,900 + (12 x $1,400)) = $1,331,188
The above takes into consideration the cost savings that the pharmacist can help save each a patient by being incorporated into the team. Below shows the profit from just the clinic running (income-expenses).
Profit = Income-Expenses
$110,880 – $22,700 = $88,180 in profit/ year
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