1. Surviving in a Fee-for-Service World
Mark Santangelo, President/CEO

2. Thriving in a Fee-for-Service World
Mark Santangelo, President/CEO

3. Background Attorney for BlueCross BlueShield of Maryland (4 years)
Executive with Green Spring Health Services and Magellan Behavioral Health (12 years)
President/CEO Kolmac Outpatient Recovery Centers
13 years
Company grew from 250 to 1,100 patients
Revenues increased from $2.4 million to $12 million
Profits increased by over 1,000%
Only minor rate increases

4. What is Success? Continuously improving clinical outcomes (CQI)
Program accessible for targeted client base
Both financially and geographically
Provide a positive livelihood for staff
Salaries, benefits, etc.
Program financially strong to survive the unexpected and invest in new developments
Good Clinical Care = Good Financial Results

5. Today’s Topics Do we currently make money & where?
Fixed vs. Variable Costs
Collections – the importance of getting paid
Leading indicators – The crystal ball of business
Clinical Outcome Measures
Great clinical care = great bottom line
How do I attract more patients?
How do I improve things for the patients I have?

6. Do We Make Money & Where? Separate fix costs from variable
Fix costs = rent, equipment, executives and everything you can’t allocate
Allocate variable costs by different services
Allocate fix costs by service units
Don’t forget bad debt/collections as a cost
Determine profitability by service

7. Profitability by Service
2016
YTD 2017
New Patients
4.4%
Total Revenues
6.4%
Ambulatory Detox
$43.11
Intensive Outpatient
$49.66
Level I OP
$12.17
Collections
94.82%
Profits
-8.2%
New Patients
7.2%
Total Revenues
7.9%
Ambulatory Detox
$68.71
Intensive Outpatient
$61.27
Level I OP
$12.68
Collections
94.95%
Profits
13.7%

8. What to Do Next? Can I better utilize fixed costs?
Can anything be outsourced?
Do everything you can to minimize
Increased volume lowers fixed cost per unit
Can I better utilize variable costs?
Variable staffing
Marginal capacity
All work hours are not created equal
Collections

9. Variable Staffing 2 IOP Groups and 2 Level I OP Groups Classic Model
Two Counselor
Kolmac
# of 8 hour Staff 4 8 2
# of 4 hour Staff
# of 3 hour Staff
Total Hours Worked 32 64 30
Total Hours Paid

10. Collections Doesn’t matter what you do if you don’t get paid
What do we measure?
Non-responses (over 30 days old)
Rejections
Underpaid
Overpayments
Total AR (excluding overpayments) vs. billings
Measured as a percent
Measured in days

11. Collections

12. Leading Indicators Where are we headed? Let me get ready Intake calls
Admissions
Billings
Collections

13. Leading Indicators

14. Leading Indicators

15. Clinical Outcome Measures

16. Clinical Outcome Measures
How are we doing?
No show/Cancellation Rate
Engagement Rate
One Timer Rate
IOP completion
CC LOS
Overall LOS
Patient Satisfaction

17. CQI Continuous Quality Improvement
Measurement/Intervention/Re-Measurement
Importance of consistency
Don’t get lost in the details
Engagement example
Increased from 68% to 84%
220 more patients
$1,200,000 more revenue

18. Attracting More Patients
How do patients come to me now?
Previous Patient, 28 Day Residential, internet, recovery community, Legal, etc.
What is my strength?
What holds the greatest potential
Previous patient example
2014 = 16.7% = 635 patients
Developed 2 interventions
2015 = 22.5% = 874 patients

19. Enhancing Services Patients
Clinical Quality Improvement
New Services for Existing Patients
Services for Mental Health Issues
Med Management
Individual Counseling
Specialized Groups
Pain, Co-Occuring, etc.
Other Services
Nutrition
Yoga
Meditation

20. Good Care = Good Finances
A 1% drop in the no show rate means 40 more patients will get treatment = $200K in extra revenue
A 1% improvement in the engagement rate means 30 more patients will get treatment = $150K in extra revenue
A 1% improvement in the one timers rate means 24 more patients will get treatment = $120K in extra revenue
A 1% improvement in our completion rate means 22 more patients complete treatment = $100K in extra revenue
An average increase in CC attendance of 1 patient will increase profits by over $300K (we make about $400K total)

21. Low Hanging Fruit Review fixed expenses Variable Staffing
Can any be stopped?
Can anything be outsourced?
Variable Staffing
Marginal Capacity
All hours are not the same
Expand the number of patients served
Expand the services by patient
Collect what’s owed

22. Mark Santangelo, President &CEO 3919 National Drive, suite 300
My Contact:
Mark Santangelo, President &CEO
3919 National Drive, suite 300
Burtonsville, MD 20866