Program Update
Karol SwartzlanderADRC Program Director
California Health and Human Services Agency
ADRC Financial Planning Model Webinar
February 6, 2014
Agenda
Welcome & Introductions
Background
Introduction of ADRC Financial Planning Models Michael Priniski, Mercer
Terri Sult, Chi Partners (in collaboration with Sac State Univ.)
Q & A
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Consultant Teams
Mercer (The Scan Foundation Funding, San Diego and Nevada ADRCs) Michele Walker, MSG, MPA
Mary Sowers, BA
Mike Priniski, CPA
Sacramento State University, College of Continuing Education (CMS Grant Funding, Alameda ADRC) Deborah Hunt, PhD
Lindle Hatton, PhD
Terri Sult, MBA3
Background
California is undergoing a system transformation for the delivery of Medi-Cal benefits statewide
California’s No Wrong Door ADRC Model: Core partnership between AAA and ILC and then other LTSS network providers
ADRC partnerships are well positioned within their communities to play a vital role in this transformation Unparalleled knowledge of the complex service delivery
system
Track record of helping individuals understand their options and choices available in the community, including Medicare, Medicaid, Veterans Affairs, and other public and private LTSS delivery systems 4
Background
Local organizations indicated they needed technical assistance and tools to engage in the changing market place
In May 2013, released a ADRC service cost tool developed by Peggy O'Brien-Strain of Mission Analytics Group, Inc.
adapted from a cost/budget tool created by Tom Duke, Budget Manager for the County of San Diego, Aging and Independence Services
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Purpose of ADRC Financial Models
Designed to help AAAs, ILCs, and other ADRC partners develop financial projections for business planning purposes
Tools can be used evaluate the financial viability of specific programs or services, develop cost estimates to inform pricing discussions with potential funders, develop staffing plans, and/or provide estimates of the amount of reserves needed to cover losses while in the planning or ramp-up phase of new services or products.
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Comparing ADRC Financial Models
Mercer: Model A
General budgeting & financial viability model
Yearly
5 years
FTE – ADRC as a whole
Inflates Services
Service cost tool
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Sacramento State: Model B
More detailed budgeting & financial viability model
Monthly
3 years
FTE allocation by multiple services
Inflates Services & Revenue
Service cost tool
Tools and Resources
California ADRC Website
http://communitychoices.info
The Scan Foundation
http://www.thescanfoundation.org/community-based-organizations
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ADRC Mercer Business Model
February 6, 2014
Government Human Services Consulting
Project Goal: Establish a replicable business model for Aging and Disability Resource Connection (ADRC) partner organizations focused on the purchase of integrated long-term services and supports (LTSS) by managed care and other potential buyers.
MERCER April 18, 2023 11
Mercer Business Model
• The business model provides an overview on how the ADRC partnerships plan to operate, deliver value to customers, and how it will remain financially viable
• The business model was developed in conjunction between Mercer and 2 ADRCs
• It will help determine the revenue needed to break even as a sustainable ADRC without subsidies from other programs
MERCER April 18, 2023 12
Mercer Business Model
• Given the potential differences in ADRC systems, the model was constructed to be adapted accordingly
• The business model also needed to reflect the ADRC underpinnings, has built in some logic to remind partners to engage in critical analysis of business opportunities to ensure congruence with core values/core functions
• The model takes into account the budgeting needed for measuring financial viability and sustainability to help ADRCs make strong business decisions
MERCER April 18, 2023 13
Mercer Business Model
• The key components that were asked during the business model development are:
– Who are the key partners of the ADRC?
– What are the key activities of the ADRC?
– What are the key resources of the ADRC?
– Who/what are the ADRC customer segments, how to enhance the customer services, and what are the channels to address customer needs?
– What value does the ADRC bring to customers/contractors?
MERCER April 18, 2023 14
Mercer Business Model
• Components of the business model that projects up to 5 years includes:
– Grants and Contributions
– Other Current
– Contracted Services
– Agency Staff
– General Administration
– Sellable Services
Presented by:Terri Sult, MBA
February 6, 2014
Purpose of the ModelTo help ADRC partners develop financial
projections
To assess the financial viability of specific programs or services
To develop cost estimates to inform pricing discussions with managed care plans or other funders
To provide estimates of reserves needed to cover losses associated with implementing new products or services
Using the ModelEnter service volume assumptions:
The projected volume for each type of serviceThe anticipated start date for each serviceNon-service-specific grant funds
Enter staffing assumptions:Position titles and salaries# of FTEs utilized for each service% benefits and annual inflation factor
Using the ModelEnter direct cost assumptions for each
service
Select an indirect allocation / overhead method
The model will then generate total estimated costs for each service
Enter revenue assumptions:Per-unit or total revenue for each service
Using the ModelThe model will generate financial projections:
For each service on a monthly basis for 3 yearsWith detail by service for volume, revenue,
staffing, non-labor costs and net-operating income/loss
Showing the total projected net income / loss
Modify assumptions to test different scenarios
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Presenter Contact Information
Karol Swartzlander
Michael Priniski
Terri Sult