Cost Benefit Analysis VAMC Wade Park Dialysis Unit

1. Cost Benefit AnalysisVAMC Wade Park Dialysis Unit Proposals discussed to reduce current workload

2. Purpose To examine the differences between adding an additional shift of dialysis patients to the current census load and providing care for the dialysis patients in the community using the fee basis system. Costs, pros and cons will be discussed and recommendations will be presented.

3. Option 1: Additional, on-site shift Cost FY2005 DSS Data shows the total cost per encounter (cost per individual dialysis treatment) is $417 There are two estimates for the projected number of encounters that an additional on-site shift would add Projection 1: 3 encounters per week x 52 weeks per year x 40 additional veterans = 6,240 encounters Projection 2: FY 2005 DSS Data shows 11,100 encounters, divided by 2 = 5,550 encounters

4. Option 1 (Cont’d) Cost (Cont’d) Using Projection 1: 6,240 encounters x $417 = $2.6 million dollars per year Using Projection 2: 5,550 encounters x $417 = $2.32 million dollars per year

5. Option 1: Pros and Cons Pros Veterans continue to receive care on-site in close proximity to acute treatment if necessary The VA has direct oversight and management of the dialysis unit Increased continuity of care as VA doctors remain active in providing health services Cons Off-tour transportation costs are higher Off-tour wages are higher Operating costs of the VAMC are higher Additional depreciation of our dialysis machines Increased number of Veterans traveling far distances to receive dialysis care

6. Option 2: Fee-Basis Alternative Cost: The average fee basis cost per patient per month for FY 2005 was: $3,583.85 Using the number of additional veterans that we estimate would be served by implementing an additional shift in house (40) x the average per patient cost per month ($3,583.85), the total cost of using fee-basis to dialyze these patient is: $1.72 million dollars.

7. Option 2: Pros and Cons Pros Veteran receives care at private facilities in their community VAMC saves on the high cost of transportation VAMC reduces the current demand on the dialysis unit VAMC is able to provide better care to remaining Veterans enrolled in the program No additional FTE required at the VAMC Cons Loss of the continuity of care achieved by streamlining care at one site Loss of the ability to properly manage and oversee the outside dialysis unit Current Veterans may not want to leave the VA or future Veterans may not be able to access care due to capacity issues

8. Total Cost Savings Providing the additional care to 40 veterans in house by adding an additional shift to the dialysis unit would cost an estimated $2.3 – 2.6 million dollars (depending on if projection 1 or projection 2 is used) Providing the additional care to 40 veterans in their community through the fee-basis program would cost an estimated $1.72 million dollars Using Fee basis over the addition shift in house would save the VAMC between $580,000 and $880,000 per year

9. Estimated Costs for Options 1 & 2

10. Conclusion and Recommendation From completing this cost benefit analysis, we recommend that patients are outsourced using the fee-basis program rather than employing an additional shift to provide care in-house