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is a feasibility study / analysis to
determine the financial feasibility of the a Nigerian County School District
establishing a health clinic for employees and covered dependents and retirees.
TABLE OF CONTENTS
Executive
Summary
Data
and Assumptions
The
Cost of Operating a Clinic
Potential
Claim Savings
Wellness
and Disease Management Opportunities
Other
Considerations
Appendices
Executive Summary
The
Nigeria County School District (“the District”) engaged Gallagher Benefit
Services (“GBS”) to conduct a study of the feasibility of operating one or more
primary care medical clinics for the benefit of employees, retirees, and their
eligible dependents covered under the District’s health insurance plan. The
plan is self-funded and is administered by United Healthcare (“UHC”). There are
currently over 5,500 employees and 8,800 total members covered under the plan,
and annual claim costs under the plan are approximately N40 million. The GBS
study consisted of the following 3 separate sections.
1. We
estimated the cost of operating the clinic(s). Because of the range of costs
relating to the administrative fees that we have seen from different clinic
vendors, we estimate the cost using high and low administrative cost
assumptions. We also assumed that more than one location would be necessary to
provide access to all District employees. In the work that follows, we use the
term clinic to mean the clinic concept, regardless of the number of locations.
2. We
estimated the potential reduction in claims paid under the health plan due to a
combination of services provided directly at the clinic and a reduction in
unnecessary services attributable to the “gatekeeper’ function played by the
clinic. We made the estimates using two different assumptions about the % of
primary care physician (PCP) office visits that are redirected to the clinic.
We termed the assumptions “moderate” and “high” utilization.
3. We
estimated the potential for other health plan savings related to improved
health of covered members as a result of wellness and disease management
initiatives supported by the clinic. This is the most subjective component of
the study. The projected first year results of the study are summarized in the
following table. The savings associated with step 3 above are not included in
this table as they are projected to emerge over a longer period of time.
Moderate
Utilization High Utilization Administrative Fee Assumption Low High Low High Estimated
Direct Claim Savings N1,359,838 $1,359,838 $1,970,658 $1,970,658Projected Clinic
Expense N1,911,912 N2,431,080 N2,360,765 $2,879,933
Total
First Year Savings/(Cost) ($552,074) ($1,071,242) ($390,107) ($909,275)