Business Rationale for ICC Initiatives
Initiative #1: Medicaider Online eligibility
Summary: Medicaider is an online eligibility tool, for use with uninsured patients. Its purpose is to assist eligibility workers in determining eligibility for Medicaid, SSI, SCHIP, and other federal and state programs for low-income individuals. The ICC has contracted with Network Sciences LLC to customize the tool with the addition of criteria for eligibility for Title V, Title XX, and MAP funding, as well as COA Sliding Scale, Seton Care Plus, and Project Access eligibility. In addition to assisting in the determination of public funding eligibility, these customizations will make it possible for the ICC members to direct patients to whichever charity care program or programs they desire at any given time.
Rationale for Choosing this Initiative: The ICC HRSA CAP grant included eligibility determination in a project objective. Eventually, the ICC would like to integrate information received through use of this tool into the I-Care system.
Development Costs: The ICC has committed to paying the full cost of developing the tool as described above from its HRSA grant revenues. Development costs are $22,000, plus a $12.50 transactional fee per Program Eligible Applicant during a three month pilot (estimated to be approximately $3750 for 300 PEAs) for a total of $25,750. In addition, the ICC paid Seton eligibility workers $6,000 to complete 1,000 eligibility screens during the three month pilot, so that potential ongoing costs and benefits could be determined. These prices do not include the cost of Case Tracker, a module that could enhance the ability of members to assure that eligible individuals file assistance applications.
Ongoing Costs: $12.50 transactional fee per PEA, plus staff time for eligibility reviews, plus costs associated with assuring that eligible individuals complete applications.
Return on Investment: The pilot has yielded a benefit-to-cost ratio of 6.1 to 1, based on the following findings (n=1013): Eligibility workers completed 10.7 Medicaider determinations per hour (85% of determinations were completed in 3 minutes or less), 20.3% of those interviewed (n=206) were determined eligible for a Federal or State funding source; a potential reimbursement of $17.50 per clinic visit (based on the lowest actual average reimbursement at a Seton clinic) could be collected for each eligible individual; each eligible individual will have 2.8 encounters in a year (based on national data and ICC Primary Care Use and Capacity Study); and that one in ten visits would be in an emergency department (based on ICC ED use study).
In the pilot, a $3,996 “ongoing” cost yielded a potential $24,514 in captured reimbursement. The pilot group represents an opportunity sample of approximately 1% of uninsured people presenting for care at ICC member sites. If this were a representative sample and Medicaider eligibility determination were adopted throughout the ICC system, the return on investment could be between $2 million and $5 million annually (representing captured third party reimbursement), assuming that members assured that eligible individuals completed the application process.
Business Rationale for ICC Initiatives
Initiative #2: Pharmacy Group
Summary: The ICC has determined that it could be beneficial to members to form a purchasing group to negotiate pharmacy discounts for all members, while maximizing participation in the 340B discount program. Components of the group initiative include: applying for inclusion of additional hospitals in the 340B program, applying for an Alternative Methods Demonstration Program initiative, and forming a purchasing group using a preferred drug list.
Rationale for Choosing this Initiative: Member pharmacy costs are skyrocketing, and these initiatives have potential for saving significant dollars to members, with low financial risk.
Development Costs: Approximately $103,000. The ICC has committed $53,000 from its current grants to development of the pharmacy initiatives.
Ongoing Costs: Initial ongoing costs could be approximately $250,000, offset partially by a sharing of administrative fees paid by drug companies to the group.
Return on Investment: The potential financial benefits to members are significant if this project is fully implemented. (1). An indeterminate, but significant, amount of savings is possible to those members (possibly St David’s and CTMC) who could participate in the 340B program, but may not be at the present time. Assuming eligibility, then all outpatient pharmaceuticals, including those used in EDs, and for outpatient surgery could be covered by this pricing. (2). $1.125 million or more could be saved by members through adoption of a PDL and subsequent group negotiation. This estimate is derived by multiplying an estimated 7.5% savings on an estimated outpatient pharmacy volume of $15 million. The $15 million is slightly higher than the current amount reported by members, the 7.5% is in the mid-range of reported savings realized by purchasing groups of a similar size to ours. (3). A savings of several million dollars is possible through the inclusion of more providers in the 340B program, and more patients in the 340B program. The exact amount of the savings is indeterminate, and dependent upon both the 340B and non-340B volumes for each participating provider, any other discounts for drugs each provider may currently receive, the numbers of providers who may be eligible to participate in the 340B program, and the number of patients who might be covered by the 340B program under a network demonstration. Offsetting these savings would be operational costs associated with establishing and managing the purchasing group, and members might have to share the costs of the staff who would perform these tasks.
Business Rationale for ICC Initiatives
Initiative #3: Project Access
Summary: Through Project Access, the TCMS and the other ICC members are working together to share the burden of providing primary and specialty care to the uninsured more equitably among area providers. Primary and specialty care physicians are being recruited to volunteer to provide care to up to 10 (primary care) or 20 (specialty care) uninsured people per year.
Rationale for Choosing this Initiative: An increase in the number of physicians providing care to uninsured individuals, in addition to a system for organizing this care, has proven to be an effective way of spreading the care burden equitably among physician volunteers, while generating significant value in donated care.
Development Costs: $310,000 was committed in a 50/50 partnership between the ICC and the TCMS to get Project Access up and running.
Ongoing Costs: In addition to administrative costs, there will be ongoing costs associated with providing for subsidized drugs and lab tests, as well as possibly transportation. These ongoing costs could be approximately $250,000.
Return on Investment: The potential financial benefits to members are significant if this project is fully implemented. If MDs were to see 5000 people in the course of a year, at a value of $75 per visit this would yield approximately $375,000 in donated care alone. However, the value of Project Access comes about also in the leveraged care that it yields (including pharmacy and lab for patients, as well as other sources of donated services). Moreover, with many patients diverted directly from hospital ER care to Project Access, the potential savings to hospitals is significantly higher than $375,000. In Buncombe County and other communities where Project Access has been implemented, it has proven its worth over time, and the TCMS model is faithful enough to the original that similar returns should be anticipated.
Business Rationale for ICC Initiatives
Initiative #4: I-Care
Summary: The purposes of the I-Care system are to (1) provide an effective backbone for continuity of care – (reduce volume of labs, radiology and other diagnostic ancillaries, provide better management of pharmaceuticals, provide access to a wider range of therapeutic ancillaries, and increase physician efficiency) (2) provide an accurate measure of demand for healthcare resources by the indigent, and (3) reduce the number of ambulatory care sensitive admissions to local hospitals by providing preventive care and chronic disease management.
Rationale for Choosing this Initiative: The I-Care system lays the foundation for a variety of ICC initiatives. It makes possible the formation of a 340B network, facilitates referrals to and from Project Access, and makes disease management and care coordination more effective, and can make it much easier to collect both eligibility data and information about medical homes. It makes it possible to reduce duplicative lab tests and other medical procedures.
Development Costs: Through August of 2003, the total development costs for the I-Care system, including pharmacy and lab interfaces, will be approximately $2.2 million, all of which will be covered through grants, primarily HRSA CAP grants.
Ongoing Costs: The ongoing annual costs of maintaining the I-Care system at its full development level will be between $750,000 and $1 million, depending on the number of users.
Return on Investment: The financial benefits to members are potentially significant, but mostly indirect, if this project is fully implemented. If the system is used by clinicians primarily to improve the delivery of health care, then the benefits will likely be to patient health and well-being and, downstream, this will result in lowered inpatient and specialty care costs. If, however, it is used by clinicians primarily to replace duplicate services, then the benefits would also be seen in immediate reductions in costs of care for this population. An evaluation of the Disease Management pilot should help us to understand this.
Other indirect benefits that could result from the use of the system relate to improved planning and financing of care, through improved understanding of utilization patterns of the client population. Still others could result from using the system to maximize the effects of other initiatives. For example, if the system is used to identify the universe of patients who should have periodic eligibility redeterminations completed, it will enable the Medicaider initiative to realize close to its full potential over time. Similarly, if the system makes it possible to include additional patients under the 340B umbrella (something that would not be possible without a shared health record), then further cost savings could be realized.
An analysis of pharmacy costs hints at the potential savings that could result from widespread application of the system. The pharmacy costs in the MAP program are $403.08 per person per year. Assuming that (1) this cost is the norm for all patients in the MPI/CDR, (2) 25,000 patients are seen by multiple providers, and are prescribed at least some drugs by each provider, and (3) 15% of prescriptions to these people could be eliminated through use of the system because they would be found to be redundant or inappropriate, then the resulting savings would be $1.5 million.
Business Rationale for ICC Initiatives
Initiative #5: Disease Management
Summary: The purpose of the Diabetes Diseases Management pilot is to use an online tool in conjunction with agreed-upon protocols to manage chronic disease and to improve patient outcomes. The ITRAX system is the online tool being used for this purpose.
Rationale for Choosing this Initiative: Improved management of chronic conditions should lead to improved health outcomes and less cost to the system.
Development Costs: Through August of 2002, the total development costs for the Disease Management pilot were approximately $15,000. An additional $1,000 per month has been set aside in the ICC budget through 2003 to continue the pilot.
Ongoing Costs: The ongoing annual costs of maintaining the ITRAX system will be approximately $12,000.
Return on Investment: The potential financial benefits to members are significant with this pilot. While it is difficult to quantify them in advance, the assumption is that better outcomes will be obtained through disease management. For the pilot, baseline data are being collected for over 200 patients for the period between January 2002 and September 2002. As clinicians begin to use the system in October 2002, time periods will be compared to the baseline to determine the effects of the pilot, and to measure benefits. Because the investment of dollars in the ITRAX system is relatively low, and the ongoing costs are similarly low, it is likely that with relatively minor changes in patient health status, it will be possible to demonstrate the cost-effectiveness of the initiative.