Springs Healthcare
Business Budget Case
Contents
Executive Summary
Springs After Hours General Practice Clinic, provider of the Nepean Blue Mountains Primary Health Network (NBMPHN), has commenced a complete evaluation of needs to help in detecting and scrutinizing the service and health requirements of the populations living in the Nepean Blue Mountains (NBM) area. The outcome of this needs evaluation has assisted in influencing the primary significances of the area, which needs to be deciphered into a balanced, moral, and financial plan. The plan addresses chronic conditions, the needs of older persons, mental health, drug and alcohol issues, access to social and health services, and demographic concerns that affect leading healthcare. These strategies will comprise of identifying primary healthcare and medical services choices that can be purchased or sourced via a commissioning strategy to better enhance essential care services in delivering the correct care at the right place and time in the area.
In commissioning the needs assessment, Springs Healthcare was involved mainly with several central agencies, communities, and stakeholders in the area. This process entailed the use of data collected through the consultations undertaken with the regional consumer individuals, the Culturally and Linguistically Diverse, Aboriginal Community, key healthcare providers, as well as government and non-governmental organisations. Presently available epidemiological data was found from the Nepean Blue Mountains Local Health District (NBMLHD) to offer quantitative information. Additionally, socioeconomic and demographic data that reflects the social and health determinants and market analysis were used to inform us of the unmet service and healthcare needs. Collectively, an outline of the gaps in the Nepean Blue Mountains region in unmet healthcare needs has been analysed and developed to appraise options, priorities, and opportunities for future healthcare and service development. The main areas that corresponded to the state and national priorities comprise Older people, chronic and preventable conditions, demographic and cultural factors that influence healthcare status, mental healthcare, access to healthcare services, and alcohol and drug abuse.
Outline
The main areas that corresponded to the state and national priorities comprise Older people, chronic and preventable conditions, demographic and cultural factors that influence healthcare status, mental healthcare, access to healthcare services, and alcohol and drug abuse. The Nepean Blue Mountains region has an ageing population that is susceptible to chronic and preventable conditions. The main risk factors that contribute to the development of chronic and preventable diseases and their occurrence in this area include high body mass index, sedentary lifestyle, smoking, high blood pressure, and excessive consumption of alcohol. The high rates of comorbidity related to chronic diseases lead to higher treatment costs and complex care needs. A principal factor that compounds the occurrence for the region is the ageing population. Fragmented care management of chronic disease was similarly a crucial concern consistent with the findings of the state and the nation.
Background
A significant increase in the prevalence of diabetes by 3.7% over ten years (2002 to 2012), while only 19.7% of people with diabetes in the region are registered with the National Diabetes Services Scheme. • Cardiovascular disease is the leading cause of death in the area (2012) with significantly higher rates for females than the NSW population. • One in five people are reported to be obese, and one in three are overweight (2014). Rates of overweight and obesity in the Nepean Blue Mountains region (63%) compared to the national average (62.8%). The proportion of overweight or obese persons in the Nepean Blue Mountains region increased from 61% in 2007-08 to 63% in 2011-12. • Respiratory disease is the third leading cause of death in the NBM population (2010-11) accounting for 4.9% of hospitalisations with males being more significantly affected however the female respiratory death rate (54.7 deaths per 100,000 people) is significantly higher than the NSW female rate of 40 (2010-11). COPD is the leading cause of potentially preventable hospitalisations in the region (2011-12), following in a 6.1-day average length of stay. There is also a high prevalence of asthma for children and adults amongst the eight metropolitan health regions. Hospitalisation rates for influenza and pneumonia are significantly higher than the state average. Conversely, antimicrobial prescribing rates relevant to flu and pneumonia symbolized a wide variation with particularly high standards in the Penrith and Hawkesbury LGAs.
Compared to the state average of 3.30% growth in older persons as a proportion of the total population, NBM will experience an overall growth rate of 5.13% between 2011 and 2026. At 6%, Penrith LGA will experience the highest growth – almost double the state average (NBM Local Health District, 2013).
The average cost of treatment for people aged 75 yrs and over is 2.4% higher than the NSW average. Consequently, nearly all patients aged 65 years and over attending a GP consultation have one or more diagnosed chronic conditions. Inadequate support and a lack of services for older people and carers impact the entire region. The effects of these increasing demands highlight the need for appropriate and timely access to healthcare services. Addressing potentially avoidable admissions for this cohort is essential. Influencing factors that lead to their presenting or being admitted to the hospital include complications of polypharmacy, opioid use for chronic pain, and fall-related injuries. The promotion of advanced care directives to ensure older persons care wishes are transparent to health service providers remains a need.
The target clients are the people in the community who need access to the after-hours GP and also aged care facility residents. The after-hours GP is required because there are so many aged care facilities around the area. Therefore, instead of sending the residents to hospitals, having the GP visiting and checking them at the facility will reduce unnecessary hospital admissions.
Based on the 2011 census data, more than 70,000 people in the region may be involved in risky use of tobacco, alcohol, and drugs, including methamphetamine. Illicit drug use is a significant risk factor for mental illness, suicide, self-inflicted harm, and overdose, with the rates of mental illness almost doubling with illegal drug use. It is one of the top five medical diagnoses related group (DRGs) separations (excluding detoxification) averaging 80 per month.
Mental and behavioral disorders are the fifth leading cause of death in the NBM region, accounting for 4.6% of all deaths (2010-11). Key Facts • Male hospitalisation rates for mental disorder is highest among the 15 NSW LHDs and significantly higher than all the metropolitan LHDs. Corresponding female hospitalisation rates are fourth highest amongst the 15 NSW LHDs and fourth highest among the eight NSW metropolitan LHDs. • High suicide rates for middle-aged and older men (2.8 times the age-standardised rate for women), peaks at ages 35 to 54 and sees a substantial spike at age 85+ over. There are increasing rates of suicide among youth with recent surveys indicating 7.5% of 12 to 17 year-olds have seriously considered attempting suicide in the previous 12 months (2013–14). Suicide rates for Indigenous Australians are high (2.25 times age-standardised, 2001-2010), higher than the NSW average.
Source:
The Proposal
The Medicare Local suggests improved aged care services, including nursing home beds and home care support.
Aims
The main aims of this proposal include:
- To reduce the cost of healthcare access in the region.
- To improve the healthcare service delivery to the aged population in the region.
- To increase the revenue of healthcare services.
Benefits
- Efficiency gains
This proposal seeks to improve efficiency through the use of three measures:
- Using bar codes tags for inventory management. Tagging equipment with bar codes as they arrive at the hospital will help organize the process.
- Using data to predict patterns.
- Staying updated on revenue cycle technology.
- Potential savings/increased costs
A significant reduction in total non-urgent presentations to the Emergency Department will occur in two years after the opening of the SAHGPC clinic.
- What are the expected benefits of this proposal?
| Factor | Benefits |
| Patients
| Most patients presenting to the SAHGPC classified their visit as essential. |
| Facility
| Over half, the region’s population would have gone to the emergency department had the SAHGPC not been functioning. |
| Clinicians | Most clinicians consider most presentations to be appropriate. |
| Other | Client satisfaction will be high, and most would use the clinic again. |
Risks
The risks associated with this proposal are listed in the table below.
| Risk Issue | Severity | Impact | Mitigation Plan |
| Financial risk | High | Increased the cost of the executive and statutory functions per head of population | Having a well executable financial plan can help to mitigate such risks. |
| Patients | High | Increased operational costs and maintenance | Maximizing the available funds to support effective implementation of change using managers with local knowledge |
| Insurances | High | High Spatio-temporal volatility | Implementing the schemes that distract and potentially crippling financial risk issues |
Process
- Action
The Seven Steps of Action Planning in healthcare system comprise of;
- Define the Problem(s)
- Collect and Analyze the Data.
- Clarify and Prioritize the Problem(s)
- Write a Goal Statement for Each Solution.
- Implement Solutions: The Action Plan.
- Monitor and Evaluate.
- Restart with a New Problem, or Refine the Old Problem.
Reporting of outcomes
The project will be headed by an appointed project manager who oversees the implementation of all the processes and monitors and reports on the outcomes, savings, and any decreased costs for this project. The action plan’s description will be sent every three weeks to monitor the progress of the project.
Financial Information
| Expenses | Income | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Category | Item/Costs | Formula | Calculation | Explanatory Notes | Category | Product/Service | Formula | Calculation | Explanatory Notes | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Staffing | General Practitioner Monday to Friday from 6.00 pm6.00 PM to 4 AM. | number of staff x hourly rate x hours x days of work x 52 | $ 364,000.00 | Average GP Salary in Sydney $100 per hour. | Income | General Practitioner after-hours residential home visit Monday – Thursday from 6.00 PM to 4.00 AM | Number of product/services x number of patients x days of operation x weeks of operation x cost per service | $ 307,954.83 | This after-hour General Practitioner (GP) service is for a residential home visit only. The shift is from 6.00 PM to 4.00 AM. The time taken for GP to attend one patient is at least 20 minutes and the assumed travelling time is about 10 minutes for each visit. Therefore, it is estimated that the GP will be able to attend at least 13 patients at their homes per night. This service is bulk billed via Medicare, so no out of pocket cost for patients. The Medicare fee item that we will claim is item 5043 which include the fee for item 5040 ($85.30) plus $26.35 for the first 6 patients. From patient 7th we will receive $2.05 per patient. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| General Practitioner Saturday and Sunday from 10.00 AM to 4 AM. | number of staff x hourly rate x hours x days of work x 52 | $ 187,200.00 | General Practitioner after-hours residential home visit Saturday – Sunday from 10.00 AM to 4.00 AM | Number of product/services x number of patients x days of operation x weeks of operation x cost per service | $ 284,954.80 | Target is 30 patients (20 minutes visit and plus 10 minutes travel time). This service will be broken up into two shifts, 8 hours each with 30 minutes break time for each shift. Medicare item that we will be claimed is item 5043. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Receptionist / Office Manager Monday to Friday 12.00pm to 6.00pm | number of staff x hourly rate x hours x days of work x 52 | $ 36,394.80 | Receptionist salary $23.33 | After-hour GP attending a resident in an Aged Care Facility. Monday – Thursday from 6.00 PM to 4.00 AM | Number of product/services x number of patients x days of operation x weeks of operation x cost per service | $ 145,405.00 | Medicare item 5049. The fee structure include, the fee from Medicare item 5040 ($85.30) + $47.45 divided by the number of client (up to 6 clients). From patient 7th, the fee will be item 5040 plus %3.35 per patient. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| After-hour GP attending a resident in an Aged Care Facility. Saturday – Sunday from 10.00 AM to 4.00 AM. | Number of product/services x number of patients x days of operation x weeks of operation x cost per service | $ 40,419.60 | Medicare item 5049. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Oncosts | total cost of staff above x 15% | $ 88,139.22 | TOTAL INCOME | Insert total amount here -> | $ 778,734.23 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| TOTAL STAFFING | Insert total amount here -> | $ 675,734.02 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Consumables | Stat Medication | (number of item x frequency of use x number of patients x days of operation (per week) x weeks of operation) x cost per item | $ 37,215.36 | Stat medication is a medication that need to be given to patient immediately as patient may not have been able to access the chemist after hour. With assumption that each patient will receive 1 tablet antibiotic ($1.25) and 2 tablets of paracetamol ($0.44/tablet) the total cost for each patient will be around $2.13 | Break Even Calculation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Insert consumable type here | (number of item x frequency of use x number of patients x days of operation (per week) x weeks of operation) x cost per item | TOTAL INCOME | $ 778,734.23 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Insert consumable type here | (number of item x frequency of use x number of patients x days of operation (per week) x weeks of operation) x cost per item | minus TOTAL COSTS PER YEAR | $ 751,164.06 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Insert consumable type here | (number of item x frequency of use x number of patients x days of operation (per week) x weeks of operation) x cost per item | Profit / Loss | $ 27,570.17 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| TOTAL CONSUMABLES | $ 37,215.6 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Utilities | Car Leasing | (Cost of utility per week)x 52 weeks – Note: You may also use quarterly calculations in this section | $ 10,660.00 | Based on novated lease. Car is for GP to travel. | If the Profit/Loss row is NEGATIVE, your service is LOSING MONEY. Increase your income. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Electicity | (Cost of utility per week) x 52 weeks | $ 2,600.00 | Small office with minimal appliances. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| TOTAL UTILITIES | $ 13,260.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Administration | Stationary | Cost of administration item per week x weeks of operation | $ 498.68 | Pen, printer ink, printer paper, envelop and stamp. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Phone Bill | Cost of administration item per week x weeks of operation | $ 1,456.00 | 2 mobile phone (including plan). 1 for receptionist and 1 for the GP. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Website fee (for online booking) | Cost of administration item per week x weeks of operation | $ 377.00 | Premium website subscription fee based on Wix.com | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Building Rent | Cost of building rent per week x 52 | $ 21,600.00 | The weekly rent in the area for an office is around $415.38 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| TOTAL UTILITIES | $ 23,931.68 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation | Depreciation | Total value of equipment x 20% | $ 1,023.00 | This include 2 office tables, 4 office chairs, 1 printer, 2 computes and its software, 1 filing cabinet, 1 office cupboard, office decoration and signage | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| TOTAL DEPRECIATION | Insert total amount here -> | $ 1,023.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| TOTAL COSTS PER YEAR | Total of each of the five section totals | $ 751,164.06 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
References
Carlisle, K., Fleming, R., & Berrigan, A. (2016). Commissioning for Healthcare: A Case Study of the General Practitioners After Hours Program. Aust J Prim Health. 22(1):22–5.
British Heart Foundation. (2019). Business case toolkit. Available from: https://www.bhf.org.uk/for-professionals/healthcare-professionals/resources-for-your-role/business-case-toolkit.
Australian Institute of Health and Welfare. (2015). Emergency department care 2014–15: Australian hospital statistics, Health services series. No. 65 ed. Canberra: AIHW. p. 9.
Jones, R. (2012). Financial Risk in GP Commissioning: End of Life Costs. BJHCM 18(7): 374-381.
Australian Bureau of Statistics. 3101.0 – Australian Demographic Statistics, Jun 2015. Canberra: ABS; 2015. Available from: http://www.abs.gov.au/AUSSTATS/abs@.nsf/allprimarymainfeatures/6CBA90A25BAC951DCA257F7F001CC559?opendocument.
Allen, P.L., Cheek, C., & Ruigrok, M. (2015). Rural emergency departments supplement general practice care. Med J Aust. 202(1):17–8.
NSW Government Treasury. (2019). Business Cases. Available from: https://www.treasury.nsw.gov.au/information-public-entities/business-cases.
NSW Government Business Case Guidelines (TPP18-06). Summary of the Business Case Guidelines TPP18-06.
Currey, N., Rumbold, B., Edwards, R., & Arora, S. (2013). Managing Financial Difficulties in Health Economies: Lessons for Clinical Commissioning Groups. The Nuffield Trust, London.
Fry, M.M. (2011). A systematic review of the impact of afterhours care models on emergency departments, ambulance and general practice services. Australas Emerg Nurs J;14(4):217–25.
Allen, P., Cheek, C., Foster, S., Ruigrok, M., et al., (2015). Low acuity and general practice-type presentations to emergency departments: a rural perspective. Emerg Med Australas. 27(2):113–8.