WASHINGTON DC — Our goal is to create a replicable and scalable center of excellent for the treatment of diabetes for minorities and low-income communities in and outside of the United States. Our diabetes treatment center’s (DTC) model is designed to be a self -sustainable and replicable model in countries and communities with high prevalence of type-2 diabetes mellitus (T2DM) in the Gulf states of Kingdom of Saudi Arabia (31.6%), UAE (25%). Kuwait (25.4%) and Oman (29%)
[United Arab Emirates Minister of Economy HE Sultan bin Saeed Al Mansouri and Shurooq Chairperson Sheikha Bodour Al Qasimi speaking with Capitol Intelligence using CI Glass at US-UAE Business Council in Washington, DC. September 22, 2014.]
We plan to have a DTC which via careful monitoring of surrounding communities and patients, will transformationally improve outcomes of the historically discriminated Hispanic, Black American and poor white communities. This model will be at least in one way, similar to Cleveland Clinic of Ohio whose international partnership led to the Abu Dhabi, United Arab Emirates-based Mubadala Sovereign Wealth Fund (SWF) investment in the creation of the Cleveland Clinic in Abu Dhabi, in terms of exportation of a success proven model in the treatment of diabetes.
Through aggressive preventive measures including pre-screenings and educational campaigns, fully covered by the 2010 Patient Protection and Affordable Care Act (PPACA) and Medicaid expansion, we will efficiently reduce the prevalence of diabetes in the 40 miles radius of the location of our DTC.
The physical DTC centers will be financed by Abu Dhabi’s Mubadala SWF fund as real estate investment in economically depressed communities in the United States while the DTC centers themselves will operate at above breakeven basis covered by Obamacare and Medicaid expansion in individual states. Mubadala is able to exploit the zero tax benefits of investing in economically depressed areas in the United States as mandated by the Opportunity Zones legislation passed as part of President Donald Trump’s tax reform legislation.
in the city. Our plan is to become global leaders in diabetic care delivery for low income populations and beat the market’s competition by delivering the highest quality of care possible at the lowest production cost possible. We plan to reduce the prevalence of type-2 diabetes by organizing multiple prescreening campaigns at our organization and the communities that surrounds it. We will hire bilingual staff with English and Spanish to serve the dense Hispanic community which surrounds our hospital. Our Mission is to create a value driven treatment center that meets and exceeds the needs of the low-income populations affected and at risk of diabetes. We will plan to create an age and gender specific DTC which will provide individualized treatments while easing data collection for informed decision and information sharing in the future. Our DTC will be centrally located to facilitate access and free parking will be made available to ease the burden of hospital visit on the patient. We will provide an oasis of wellbeing by having significantly esthetic facilities where patients are motivated to visit. We plan on being financially independent by our fifth year of operation.
I. Program Overview
a. Location
St Anne diabetes treatment center (DTC) will be centrally located, accessible to populations coming from all the corners of the city. The DTC will have four vehicle accessible and carefully attended entrances to receive patients coming from all corners of the city. All four entrances will have the hospital’s directory and plan in both English and Spanish languages including bilingual staff for further assistance. The DTC will also work in collaboration with medical transportation organizations in order to limit transportation challenges commonly faced by low income communities. Our goal is to ensure patients trip to our facility is pleasant and stress-free and reduce the number of appointment no-shows due to inaccessibility to our organization. It is this respect that our 4,175 square foot campus will also comprise of multiple level underground parking garage of 8 and 11 feet wide free parking spaces for vehicles and vans respectively, with 5 feet wide access aisles. This will help avoid the seemingly nonsignificant but highly consequential issue of parking unavailability faced by most city organizations due to lack of parking space. We want to make our patient experience as pleasant as possible and parking plays an important role in that. We will offer clean and modern facilities accessible at all levels by ambulatory chairs and devices. We will strive to ensure our DTC is located away from any source of pollution and any particularly noisy establishment like railroads. Our goal at the St Anne DTC is to reduce as much as possible all the factors that contribute to poor health conditions in and around or facilities. We will create health conducive facilities where patients are excited to visit, feel safe, at ease and cared for.
b. Services
We plan to offer gender and age specific services at St Anne’s DTC and our future replicated DTCs, including specialized services for pregnant women suffering from diabetes. Our underline goal is also to reduce maternal and perinatal morbidity rates typically high in low income communities. We also plan to reduce the number of babies born with macrosomia, a form of obesity in babies born to diabetic mothers, via aggressive food choices education for the entire community with high emphasis to pregnant women. Our health care goal is to contain and reduce the development of diabetes among this vulnerable population. We have opted to separate our patient population according to gender and age to efficiently and effectively address our patients needs but also to create an effective and accurate data tracking technic in order to be able to make informed and high-impact health care decision for our patients in the future. We want to make data tracking a key component of our services as we want to create in the long run, predictive and replicable models that will help engage our patients and lead to a low investment and great outcome model. We would also like to keep tract of our staff’s activities in order to have ample information to meet organizational goals.
An important aspect of services provided at our organization will be preventive services. We plan to direct enough resources on community services based on diabetes prevention. Preventive services will include free education on healthy food options, low cost physical exercises education including demonstrations and blood pressure monitoring which will also be offered at our numerous community preventive campaigns. We plan on training all our staff on diabetes prevention education and have them alternatively man the diabetes prevention department and provide educational services in and outside of our organization. Prevention services will also include web based educational material that would be found on our web site. There will be targeted weekly distribution of educational brochures in both English and Spanish in our organization and the community. Educational metrical will be written in simple communicative language accompanied with meaningful images easy to understand by a six grader. This will help remove any barriers linked to low education attainment. Educational material will also consist of teaching patients and community members at community events how to properly use glucometers for home blood glucose monitoring (HBGM). Patients will receive highly accurate HBGM devices together with test strips at a symbolic price of $50 cents to deter waste. We also plan on having a processing center for patients whose conditions will already be at advanced stages, to ease the burden of the disease on our patients. The processing center will work in close collaboration with appropriate health organizations to provide patients with all possible hospital options and make detailed and comprehensive arrangements for patients’ transplant procedures, while including patients and their families in the process.
Our organization is committed to preventing diabetes via educational and prescreening campaigns for early detections and providing comprehensive medical care to individuals already suffering from diabetes type-1 and 2, from the moment the condition is diagnosed.
c. Other Professional Offerings
We plan to create a team of well-rounded professionals who master the condition we set out to cure and are efficient in its prevention. We will organize multiple seminars at our organization and use our networking contacts to invite team of experts to our organization to share knowledge on diabetes treatment and prevention methodologies. It is imperative to our organization that our staff stays trained and ready at all times to face new complications linked to the disease. We plan on encouraging our staff to pursue new certifications and trainings in order to remain efficient in their respective fields. As incentive for this, we will give our staff a 1.5% pay raise if they obtain certifications in fields that will be deemed critical for diabetic patient care. We will organize weekly internal meetings to share new findings on diabetes and train our staff on patient education and disease prevention for our daily interactions with patients and community events. We train our staff to be culturally inclusive as we plan to replicate our model in communities with high diabetes prevalence when funds will be made available.
d. Staffing Needs
Our dialysis center will be staffed with a team carefully selected professional in whom we will inculcate a culture of precision, innovation and excellence. To start up we will need at least 9 professionals the first 5 years. we will need 1 physician, 2 nurse practitioners, 2 nurses one dialysis technician and 3 highly trained and service-oriented assistants/receptionists. Our physician is expected to see up to 3000 patients per year and our two nurse practitioners are expected to see up to 2000 patients per year each, all providing high quality and individualized patient-centered services. Our 2 nurses will serve all our patients. They will provide intake services and triage patients to be seen by different providers at different levels of care accordingly. We will have a highly trained dialysis technician who will work in close collaboration with the rest of the medical team to provide quality services to our patient population. The DTC will also have 3 highly driven assistants who will master the in-and-outs of our services and our facility. Our assistants will serve as support staff. They will provide outstanding customers services to our patients. They will greet patients, register them, verify their insurances and collect payments accordingly and in a timely manner. Our assistants will maintain effective communication with the rest of the medical team which will create a smooth work flow while guaranteeing efficient, high quality and individualized patient care. They will provide answers to patients’ basic questions and assist them with services such as directions.
e. Operating Model
We plan to take full advantage of our market to create a reputation of excellence in diabetes treatment through maximum diabetes screening campaigns, excellent management of the condition and aggressive preventive campaigns. We plan to provide a gender and age specific care which pays close attention to the illness across the life span. Our staff will be trained to deliver high quality care with resources available. We will lay emphasis transitioning from our center to the community. Patients will ensure our patients get enough discharge information especially on medications and diseases monitoring for their survival in the community. Our electronic health records (EHR) will be patients accessible and also contain a patient education section. Nutrition classes to accompany each patient visit. Our dialysis technician will understand the critical nature of his role and provide high quality patient centered services. We will ensure our goal is clearly communicated across the board at our organization and all our staff will understand the critical nature of their respective roles in achieving our organizational role.t
II. Market Profile
a. Market Overview
According to the CDC, Alaskans had the highest prevalence of diagnosed diabetes, followed by African American then Hispanics. The diverse population group of the city will provide a significant marker pool which should enable St Anne’s DTC to make a net profit of at least $175, 406 at the first year, seeing a minimum of 4,882 patients. According to a 2017 report released by the Centers for Disease Control and Prevention (CDC) titled “New CDC report: More than 100 million Americans have diabetes or prediabetes”, minority groups are the most affected by the diseases. The diversified population the dialysis center hopes to serve, consists of minority groups for the most part. According to the CDC, African Americans and Hispanics are the most affected by diabetes, after American Indians and Alaska natives. Then comes white none-Hispanics. The population surrounding St. Anne Hospital consists of 50% Hispanics, 25% Caucasians, 12% African Americans and 13% immigrants from Northern Africa. This is an indication that the hospital has high chances of meeting its targeted number of patient visits per year and we forecast a 5% increase in our number of yearly visits, considering the potential high prevalence of diabetes among the population we will be serving.
We plan on marketing our organization and make our presence in the city strongly felt not only by surrounding populations but by the entire nation after a few years of result driven advertisement. For the first five years, we plan to invest $5000 of our net revenue in advertisement of our organization and our services. Advertisement will consist of the production of flyers, organization of community events and the production of educational material. This will help ground our presence in the surrounding communities and before the local government. These activities will also help us achieve a yearly 5% growth in number of visits.
b. Demand Forecasting
Our statistics budget indicates we will see 4,882 patients the first year. We expect a minimum of 5% increase in our yearly visits for the first five years and even more after our first five years. This increase will be due to an increase in diagnosis resulting from our multiple community screening campaigns. After the first five years increase in patients’ visits will be due to the reputation we will create will attract people from far distances. We expect our marketing efforts and the unique quality of services we plan to deliver to attract patients up to 50 miles radius away from the dialysis center. After our first 10 years of practice, though we plan to reduce the prevalence of diabetes among the immediate surrounding population, we plan to serve a mix of both surrounding populations and communities coming from further distances. Our exclusively high quality of care is expected to make our treatment center stand out as one of the best DTC the city.
III. Financial Analysis
Mubadala/DTC Financial Number – Nestride Yumga by CapitolIntel on Scribd
a. Capital Requirements
St. Anne’s DTC will require a construction cost of $5.5 million, on 4,175 sq. ft of land. The total cost of construction per sq. ft is evaluated at $1,308.49. The building will constitute of modern facilities accessible to all and well equipped for different handicapped and non-handicapped patients and it will facilitate logistics for the old and innovated durable medical equipment for all our patients. The building will also come with an underground parking garage at no cost, to make patients visits as smooth as possible. Offering parking opportunities to our patients and staff free of charge will be a contributing factor to the quality of our services and make our patients visits pleasant. It is worth nothing that we are located at the heart of the city where parking is typically costly where available. Our staff and patient restricted parking garage will be a contributing factor to make the DTC stand out in the community.
For the first year, we will need a total of about $1.4 million in operating expenses. Our labor budget is expected to be the largest operational expense ($625,000) followed by utilities ($208,750) and we anticipate the trend to remain roughly the same the next four years with a slight increase of 3% each year. The rest of our operating expense will be for other expenses including cost for malpractice ($50,000), employee benefits ($156,250), medical supplies ($65,767), telephone services ($16,806), repair/maintenance ($40,500), housekeeping ($20,000), miscellaneous ($20,000) and other expenses have been estimated at ($95,351). These expenses will all amount to a total of $ 1,330,424 for the first year of operation.
To get our organization on its feet and running, we will need a total capital of at least $6,793,369.75. The first year, St. Anne main hospital will provide capital for this project. The DTC plans on being totally independent at the end of fourth year of operation as we will be able to pay for our full cost of production. Subsidies received from the main hospital is expected to decrease progressively until the end of the fourth year when we will be able to operate our treatment center independently.
b. Reimbursement Model
We will be structured for manage care payment with a focus on negotiated fee type of payment. After close financial analysis, we agreed to sign major contracts with health insurance programs at a discounted rate which will enable us to sustain our own cost of production by the end of the fourth year of operation. To stay competitive and deter insurance company monopoly of our patient base, we plan to provide the highest quality of care possible from initial contact with the patient to separation, based on short wait times, clean and safe facilities, free parking garage, highly individualized care, technologically innovated systems, curtesy transportation coordination with transportation company for patient pick up and drop off, purely multilingual staff to assist our diverse population and easy access to providers. Fees recouped from treating out of network patients will be reinvested in the production cost to improve the quality of our services. fee will go into such expenses as innovated technological devices which will help us provide quality of services to our low-income populations. Our staff will be trained to be highly efficient with procedure coding and send bills to our partner insurance company in a timely manner that will prevent us from running out of operational funds or payment delays due to mistakes in procedures coding. We plan on developing our electronic medical record system in such a way that will ease data tracking, care coordination, medical record sharing, billing and enable highly individualized services. Funds for this innovative technology will come from treating out of network patients at no discounted rates.
c. Cost Per Patient Visit
After close financial analysis, we have determined that a contracted rate of $450 per visit will enable us to cover our cost of production for a single visit and earn a net revenue. In return for providing a flow of patients at once, we will give 30 percent of our gross patient visit revenue to the insurance companies with whom we will contract. Based on the surrounding community need, we expect to see at least 4882 patients per year at same discounted rate.
a. Patient Revenue
In our first year of operation, we are expecting to see significant net patient revenue. A minimum contractual amount of $659,070 is the cost we are forecasting will be paid to the contracted insurance company. As we expect our yearly visits to increase by 5%, we expect this contractual amount to grow to accordingly. This mutually beneficial relationship between our organization and the payor puts the financial burden of care on both our organization and the payor. This will help manage resources efficiently and deter provider induced demand. We expect to see a net patient revenue of $1,537,830, seeing 4,882 patients the first year, after giving 30% of our gross revenue to the contracted payor. The five percent growth in number of patients will lead to a growth in net revenue the next year to the amount of $1,614,690 the second year of operation. And $1,695,330 the third year. This progressive growth is expected to lead to a financial growth and total independence of the organization at the end of the fourth year.
b. Operating Expenses
For our first year of operation, we have calculated an expected operating expense of $1, 330. Income from Operation including a depreciation cost of $32,000. The yearly 3% increase in salaries and operating expenditures will lead to an operational cost increase of $39,919the second year of operations, and $41,110 the third year, the fourth year will see an increase of $111,322 and the fifth year, the cost of operations will increase by $197,279. This gradual growth in the cost of production is also driven by the increase in the number of patient visits per year. We plan to cap our employees benefits at the 10th year of operations. After the first 10 years, we plan on investing part of our operating expense in more technological innovation at our organization. Our goal is to provide the best patient experience to our patients at the lowest cost possible.
c. Total expenses
To start delivering services to our patients, we will need the cost of operational expenses of $1,330,424 plus a construction cost of $5,462,945.75 which will give a total start up investment cost of $6,793,369.75. We are forecasting a payback time of four years for the operating expense excluding the cost of construction. The building the constitute a fixed cost which will remain the organization’s asset.
d. Net Cash Flow
Due to our efficient use of resources and high-quality service delivery, we expect to see a steady increase in our net cash flow over the years. Our cash flow also reveals that it will take us four years to break even in our first year’s operational expense. We plan to use the authoritarian approach of budgeting our first five years of operation due to the scale of the organization. However, as our organization will grow, we will progress towards the participatory approach in order to fully integrate cost efficiency at all levels of the organization and the organizational goal of delivering the highest quality of care at the lowest cost possible. In order to keep delivering high quality of care at lowest cost possible, we plan to keep up diabetes research and modify our delivery models based on proven treatment theories. We also plan to frequently conduct zero-based budgeting (ZBB) to maintain a financial system that corresponds to our delivery model. In this era of health care expenditure concern, we plan to conduct yearly ZBBs to limit waste and increase our efficiency. Our DTC model will be easy to replicate in low income communities all over the world and the compensation model will be adjusted accordingly. However, our mission to increase access to high quality of care for communities living below poverty line and deliver quality care at the lowest cost possible will transpire in all our endeavors.
[Chairman of the Joint Chiefs of Staff General Joseph F. Dunford with USAF Senior Airman Nestride Yumga at National Press Club in Washington, DC]
BY NESTRIDE YUMGA, MASTER OF HEALTH ADMINISTRATION CANDIDATE, WALDEN UNIVERSITY (LAUREATE EDUCATION)
nestride.yumga@waldenu.edu
References
Zelman, W. N., McCue, M. J., Glick, N. D., & Thomas, M. S. (2014). Financial management of health care organizations: An introduction to fundamental tools, concepts and applications (4th ed.). San Francisco, CA: Jossey-Bass.
Chapter 10, “Budgeting” (pp. 463-520)
Getzen, T. (2015). Health Economics for the health care administrator (Laureate custom edition). New York: Wiley.
Chapter 6 “Physicians” (pp.124-145)
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