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Program Update Karol Swartzlander ADRC Program Director California Health and Human Services Agency ADRC Financial Planning Model Webinar February 6, 2014

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Page 1: Program Update Karol Swartzlander ADRC Program Director California Health and Human Services Agency ADRC Financial Planning Model Webinar February 6, 2014

Program Update

Karol SwartzlanderADRC Program Director

California Health and Human Services Agency

ADRC Financial Planning Model Webinar

February 6, 2014

Page 2: Program Update Karol Swartzlander ADRC 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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Page 3: Program Update Karol Swartzlander ADRC Program Director California Health and Human Services Agency ADRC Financial Planning Model Webinar February 6, 2014

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

Page 4: Program Update Karol Swartzlander ADRC Program Director California Health and Human Services Agency ADRC Financial Planning Model Webinar February 6, 2014

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

Page 5: Program Update Karol Swartzlander ADRC Program Director California Health and Human Services Agency ADRC Financial Planning Model Webinar February 6, 2014

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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Page 6: Program Update Karol Swartzlander ADRC Program Director California Health and Human Services Agency ADRC Financial Planning Model Webinar February 6, 2014

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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Page 7: Program Update Karol Swartzlander ADRC Program Director California Health and Human Services Agency ADRC Financial Planning Model Webinar February 6, 2014

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

Page 8: Program Update Karol Swartzlander ADRC Program Director California Health and Human Services Agency ADRC Financial Planning Model Webinar February 6, 2014

Tools and Resources

California ADRC Website

http://communitychoices.info

The Scan Foundation

http://www.thescanfoundation.org/community-based-organizations

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Page 9: Program Update Karol Swartzlander ADRC Program Director California Health and Human Services Agency ADRC Financial Planning Model Webinar February 6, 2014

ADRC Mercer Business Model

February 6, 2014

Government Human Services Consulting

Page 10: Program Update Karol Swartzlander ADRC Program Director California Health and Human Services Agency ADRC Financial Planning Model Webinar February 6, 2014

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.

Page 11: Program Update Karol Swartzlander ADRC Program Director California Health and Human Services Agency ADRC Financial Planning Model Webinar February 6, 2014

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

Page 12: Program Update Karol Swartzlander ADRC Program Director California Health and Human Services Agency ADRC Financial Planning Model Webinar February 6, 2014

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

Page 13: Program Update Karol Swartzlander ADRC Program Director California Health and Human Services Agency ADRC Financial Planning Model Webinar February 6, 2014

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?

Page 14: Program Update Karol Swartzlander ADRC Program Director California Health and Human Services Agency ADRC Financial Planning Model Webinar February 6, 2014

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

Page 15: Program Update Karol Swartzlander ADRC Program Director California Health and Human Services Agency ADRC Financial Planning Model Webinar February 6, 2014

Presented by:Terri Sult, MBA

February 6, 2014

Page 16: Program Update Karol Swartzlander ADRC Program Director California Health and Human Services Agency ADRC Financial Planning Model Webinar 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

Page 17: Program Update Karol Swartzlander ADRC Program Director California Health and Human Services Agency ADRC Financial Planning Model Webinar February 6, 2014

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

Page 18: Program Update Karol Swartzlander ADRC Program Director California Health and Human Services Agency ADRC Financial Planning Model Webinar February 6, 2014

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

Page 19: Program Update Karol Swartzlander ADRC Program Director California Health and Human Services Agency ADRC Financial Planning Model Webinar February 6, 2014

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

Page 20: Program Update Karol Swartzlander ADRC Program Director California Health and Human Services Agency ADRC Financial Planning Model Webinar February 6, 2014

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Presenter Contact Information

Karol Swartzlander

[email protected]

Michael Priniski

[email protected]

Terri Sult

[email protected]