RHP 12 - Costs and Savings Tool Webinar

1. RHP 12 - Costs and Savings Tool Webinar

2. Select the core activity you will be using for the Costs & Savings analysis. • Keep separate running lists of your data sources and assumptions. • For example: Program Costs • Personnel costs = 2% pay increase each year to which we added 20% increase per year for personnel expenses. • We recommend that you save in a folder somewhere any data you used from research, articles, other providers, etc. for audit purposes. • You will want to keep all your data saved that you used for the Costs & Savings Tool along with explanations as to where that data came from and how you derived your numbers. Tips for Completing the Costs and Savings Tool

3. Guidance DocumentsCategory A: Costs and Savings Reporting GuidanceCosts and Savings ExamplesCategory A: Costs and Savings FAQs*These documents are on the online reporting tool in the Bulletin Board.

4. Below are websites that can be used to access and complete the Recommended Forecasting Tool: • Recommended Forecasting Tool: http://www.chcsroi.org/Welcome.aspx. • Recommended Forecasting Tool - User Guide: http://www.chcs.org/publications3960/publications_show.htm?doc_id=872816 Guidance Document

5. ROI Forecasting Calculator for Quality Initiatives

6. User Login

7. Forecasts

8. Intervention Is the intervention disease specific or non-disease specific? Providers must analyze at least three (3) years past the initial investment for the forecasted analysis. (FAQs) The timeframe for the analysis will not necessarily follow calendar years or DYs. (FAQs)

9. Target Population Select the Eligible Population from the drop-down menu. For non-disease-specific interventions (e.g. chronic care management for patients with multiple conditions) users of the ROI Calculator may intend to enroll a fixed number of individuals based on capacity or other constraints, or may plan to enroll a fixed percentage of the eligible population based on predictive modeling, risk-stratification, or other methods. In either case, for the forecasting purposes, users directly specify the size of their target population based on the expected number of patients who will be targeted for enrollment. (pg. 9)

10. Target Population Output

11. Baseline Costs Baseline costs represent the historical medical expenditures for the target population. (pg. 11) There are three optional “blank” categories available that can be defined by the user. (pg. 11) For example: Office-based care Outpatient procedures Durable medical equipment HHSC has said that you can relabel categories in the “Additional Notes” if the listed categories do not align with your organization. For example: Inpatient = Clinic Visits/Inmate Population Baseline Costs for Eligible Population will be the same as the Total Costs.

12. Costs Trends UMC used average healthcare cost increases for the population. If users do not have access to detailed trend information for each individual category of service, aggregate or average trend estimates can be used instead. (pg. 12) The trend for the eligible population should be based on data that includes the target population, should include only those categories of service that are incorporated in the target population forecast, and should be calculated in a manner that is consistent with the trend calculations for the target population. (pg. 12)

13. Cost Trends Output

14. Utilization Change This process estimates the change in utilization patterns that is expected to result from the intervention. To develop utilization change assumptions, users have three general options: Past experience/prior data Data from the evidence base Hypotheses and best estimates There’s no expected outcome of this analysis. You may have some categories increase while others decrease. Example: Clinic & Lab may increase as ED decreases.

15. Evidence Base Selections

16. Savings/Costs Summary

17. Savings/Costs Details

18. This is all costs associated with launching and administering the proposed initiative. • Make note of how and why you arrived at your numbers. • The time spent developing and managing the initiative should be included in program costs to reflect the opportunity cost of that staff time not being available for other efforts. (pg. 15) • Any additional costs not listed here can be lumped together in the last field under “Other” or Miscellaneous”. • Indirect Costs – • Some costs may not be directly connected with the intervention or may be so numerous that it may be impossible to identify each individual cost item. • In this case, a more reasonable approach to calculating indirect costs may be to use an indirect cost rate. Ex. 15% of Total Program Costs. (pg. 16) Program Costs

19. Program Costs Details

20. Sensitivity Range • Sensitivity analysis allows users to account for an overall level of uncertainty across all forecast assumptions and helps account for future unforeseen variation in assumptions. (pg. 17) • Some users will take a “ball-park” approach to determining a sensitivity range. (pg. 18)

21. Discount Rate • The discount rate is the value of today’s dollar in the future. • You must use a specified social discount rate between 3-7% for the Costs and Savings analysis. (pg. 7)

22. Results Menu

23. ROI Analysis & Sensitivity Analysis

24. Per Member Costs & Savings

25. Per Member Per Month Details

26. Analysis Summary

27. ROI Solver • Try different target ROI’s. • Analyze the results to determine the most reasonable goal for your organization.

30. Those Narrative Questions • Describe the initiative being analyzed in the Costs and Savings analysis. This description, at a minimum, should describe the initiative itself, what the initiative seeks to accomplish, and the population being targeted or benefiting from the initiative. • Summarize the results of the Costs and Savings analysis.This description, at a minimum, should include whether the Costs and Savings analysis indicated a savings/benefit or a loss from the initiative being examined. In this description, please also indicate if the savings/benefits or losses were attributed to the Performing Provider or to some other entity outside of the Performing Provider’s system, including the state or Medicaid.

31. Narrative Questions • Explain the constraints in affecting 100% of the target population with the initiative. The target population would be the patient population that the Performing Provider is seeking to affect with the initiative. • For example, limited resources or space, additional outreach/education needed, patient refusal to participate, lack of patient contact information, lack of interest, limited enrollment, etc. could all constrain a Performing Provider’s ability to affect 100% of the target population. • If a Performing Provider believes the initiative being examined in the Costs and Savings analysis reached the maximum number of patients, then please explain why. The Performing Provider’s response should also indicate how an increase in enrollment in the initiative or an increase in the number of people affected by the initiative would affect the Costs and Savings analysis (e.g., would an increase in enrollment give the Performing Provider a better ROI?).

32. Narrative Questions • Describe how the intervention being examined in the Costs and Savings analysis impacts different stakeholders. The impact must be directly tied to the intervention being examined in the Costs and Savings analysis. The Performing Provider’s response must include how Medicaid and at least two other stakeholders listed below are impacted by the initiative, and the response should indicate how the impact is tied to the intervention being examined in the Costs and Savings analysis. Please note that the narrative response does not need to include actual or estimated data. • Medicaid (required) • Other third-party payers • State or local governments (e.g., incarceration/recidivism, etc.) • Society (e.g., loss of productivity, substance abuse • leading to school drop-out or incarceration, homelessness, environment, etc.) • Employer of the patient • Patient • Other providers • Other stakeholders (Performing Providers must indicate or describe the “other” stakeholder in their response to this question).

33. Narrative Questions • Describe any benefits to the Performing Provider’s organization due to the intervention that may not be captured in the Costs and Savings analysis. These benefits could be an increased recognition for quality, enhanced market share, employee satisfaction/retention, enhanced accreditation, fulfillment of mandated requirements (such as requirements to participate in Medicaid), etc. • Describe how the initiative being examined in the Costs and Savings analysis is directly related to a current Category A Core Activity. • Describe the data sources used to complete the Costs and Savings analysis, including internal data sources and data sources from outside of the Performing Provider’s system. • Describe the assumptions made and the methodology used to complete the Costs and Savings analysis.

34. In October, Performing Providers using a forecasted analysis must complete the Recommended Forecasting Tool by inputting all necessary data requested in the tool. As the Recommended Forecasting Tool is a web-based tool, the Performing Provider needs to either print out or convert to PDF all summary/output webpages indicated in the list below. • Recommended Tool Summary/Output Webpages: • Target Population Output • Cost Trends Output • Savings/Costs Summary • Savings/Costs Detail (per Service) • Program Costs Output • ROI Analysis and Sensitivity Analysis • Per Member Costs and Savings • Per Member per Month Details, and • Summary Results along with: • Attachment A: Costs and Savings Narrative Template Required Submissions

35. Questions?