1. WOMACK, FT Bragg, NC Lithotripsy Initiative (Urology) Business Case Analysis Synopsis COL Bobbilynn H. Lee U.S. Army - Baylor HCA

2. Agenda Background Facility Service Area BCA Synopsis Analysis Questions

3. Womack Fort Bragg, North Carolina Tricare Region 2 Medical Center w/ Level I ER Approximately 157,000 beneficiaries Clinic Facilities –Joel Health and Dental –Robinson Health Clinic –Clark Health Clinic

4. Lead Agent Region Two

5. Duke University Medical Center FT Bragg, N.C.

6. Business Case Analysis

7. Background No ESWL at Bragg –National Standard of Care Not meeting Tricare Access Standards –80 miles, 3-5 week delay Patients electing stone surgery –Longer recovery

8. State of the Art Urinary Stone Treatment

10. Benefit Drivers State of the Art

11. StoneComposition Calcium Oxalate Monohydrate- 97%, protein and blood 3% Calcium Oxalate (Monohydrate form-10%, Dehydrate form- 59%), Calcium Phosphate (Carbonate form- 7%, Hydroxyl form-21%), protein and blood-3% (Gall stone)- Cholesterol- 96%, Calcium Bilirubinate- 2%, Mixed Bile Pigments- 2% Calcium Oxalate Monohydrate- 98%, protein- 2%

12. Lithotripsy Benefits Avoid Surgery for Stone (basket, cut) Continuity of care Quick return to work Meet access standards, 4 weeks, one hour drive

13. Performance Measures 32 procedures annually Direct care - 60 stone cases in OR per year 60 other cases could be done by freeing up OR space

14. Goals & Objectives Recapture $48,902 Revised financing Cost avoidance $214,920 for 90 OR procedures Eliminate 60 urology invasive procedures a year Free up 60 surgical suite rooms annually Increased satisfaction due to access Third Party Reimbursement $22,222 annually Recapture 96 ESWLs per year (8/mo) Recapture 58 surgical cases / year

15. Measures of Success Prime/ AD Beneficiaries: –Surgical procedures / OPVs in MTF increase –Surgical procedures/ OPVs provided by Network provider increase –Decrease Revised Financing, Supp care

16. Measures of Success AD and Prime Pts 95% reduction in network ESWLs 95% reduction in stones done in OR Minimum of 58 fewer referrals to network annually

17. Alternatives Equipment Purchase $350,000 Resource sharing not an option Surgery Not Considered : 1986 Send Urologist to downtown facility Mobile lithotriptor Joint Venture with regional facilities

18. Financial Implications Recapture $48,902 MCSC Rev Fin 60 OR rooms available = $ 214,920 Cost Avoidance $1,929/procedure =$22,222 Sup Funds 96 procedures @ $1,700/proc, $163,200/yr

19. Economic Analysis: 3 year investment $489,600 Net ROI on 3 year investment:$225,200 Annual target recapture –96 OPVs –60 Surgical Procedures $501 more expensive per procedure than outsourcing

20. Risks and Interdependencies Projected loss of Urologist Not Considered: Number of stone cases

21. Performance to Date Started 22 October 2001 Breakeven 1 Feb 2002 Reached target –OPVs 145/ mo; target 75 OPV/mo –ESWLS 34/ mo; target 27/mo

22. Surgeon General’s Site Army medical command knowledge exchange https://ke.army.mil/ BCAs, all forms, follow-ups FY 03 Group 2 Venture Capital submissions

24. BCA Virtues Standard of care On track with milestones Extremely well written Beautiful statistics

25. What Went Wrong Pay $500 more Per Procedure Lost Urologist Workload decreased, no cost avoidance or refinancing recapture Unable to free up OR room, no increase in OR cases How many stone cases

26. Comparative Analysis WBAMC Litho Initiative Ureteroscopy (surgery) cost vs. ESWL –$134k(3k per) 40 pts vs $26,000 (1k per) 23 proc Solicited VA pts as well

27. Additional Alternatives to Consider Send military urologist downtown, – save professional fee –Will work for other procedures, Tread mills, etc Joint venture with regional facilities for mobile unit

28. Lessons Learned Look for model, its all been done before Don’t allow faulty assumptions Even the best written can be entirely wrong When in doubt, call a fellow Bear