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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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, MBA
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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
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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
Sacramento State: Model B

General budgeting &
financial viability model

More detailed budgeting &
financial viability model

Yearly

Monthly

5 years

3 years

FTE – ADRC as a whole


Inflates Services
FTE allocation by multiple
services

Service cost tool

Inflates Services & Revenue

Service cost tool
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Tools and Resources
California ADRC Website
http://communitychoices.info
The Scan Foundation
http://www.thescanfoundation.org/comm
unity-based-organizations
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Government Human Services Consulting
ADRC Mercer Business Model
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.
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 13, 2015
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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 13, 2015
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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 13, 2015
13
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
MERCER
April 13, 2015
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Presented by:
Terri Sult, MBA
February 6, 2014
Purpose of the Model
 To 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 Model
 Enter service volume assumptions:
 The projected volume for each type of service
 The anticipated start date for each service
 Non-service-specific grant funds
 Enter staffing assumptions:
 Position titles and salaries
 # of FTEs utilized for each service
 % benefits and annual inflation factor
Using the Model
 Enter 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 Model
 The model will generate financial projections:
 For each service on a monthly basis for 3 years
 With 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
Presenter Contact Information
Karol Swartzlander
karol.swartzlander@chhs.ca.gov
Michael Priniski
michael.priniski@mercer.com
Terri Sult
terris@chipartners.net
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