Joslin diabetes center mission statement

Capital Budget Proposal Wearable glucose monitoring System

Southern New Hampshire University

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Hello everyone, my name is Margaret Breault and I am here today to present the proposal for the capital budget for the year 2020 for Joslin Diabetes Center. This proposal will maintain the mission and vision of Joslin to treat and cure diabetes.

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Introduction

Mission Statement

“Our Vision: A world free of diabetes and ins complications. Our Mission: To prevent, treat and cure diabetes.”

About

-Joslin Diabetes Center was founded in 1898 by Elliot P. Joslin, MD

-A non-profit organization which ranks in the 10% in the nation for controlling blood sugar, blood pressure, and cholesterol (Joslin, 2019)

-Joslin Diabetes Center provides care to pediatric and adult patients (Joslin, 2019)

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2

Financial Condition

2012

Total Current Assets:

$43,248,771

Total Current Liabilities:

$19,476,111

Total Expenses:

$85,983,404

Total Revenue:

$85,030,025

2013

Total Current Assets:

$34,891,187

Total Current Liabilities:

$18,695,139

Total Expenses:

$88,101,099

Total Revenue:

$85,291,074

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2011

Total Current Assets:

$42,993,914

Total Current Liabilities:

$19,247,415

Total Expenses:

$82,045,013

Total Revenue:

$80,116,904

Diabetes is one of the most prevalent diseases currently, more and more people are being diagnosed. There needs to be more research done by Joslin, in order to accommodate newer influx of patients. Overall, the total expenses have been higher than the total revenue, but if there is a way to increase the revenue, like this proposal suggests, then there would be more money that Joslin could put into research to find the cure or better treatment options for patients with diabetes. Joslin Diabetes Center is a non-profit organization which relies on grants to allow for less out of pocket expenses, this clinic provides outpatient services which typically could decrease revenue, but this proposal would allow this center to continue making strides towards a possible cure for diabetes.

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Healthcare Trends

Wearable technology: “The wearable and remote patient monitoring market has just started to take off; the Apple watch can now detect irregular heart rhythms and diabetics can monitor their blood sugar levels with digital glucose monitors” (Waldron, 2019).

Wearable glucose monitors: “The existing continuous glucose monitors have trouble with accuracy at the very highest and lowest glucose levels…although they are improving” (Dotinga, 2018).

Patients would not need to obtain finger sticks, their wearable devices would monitor the sugar levels remotely.

Better health management for patients with diabetes due to continuous monitoring of trends in their sugar levels

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Technology is prevalent in everyday life, and now it is becoming more available for healthcare, especially with wearable technology. There are devices that can monitor heart rates, sleep-wake cycles, as well as glucose levels, without the need to provide a finger stick. Since this organization strives to cure diabetes, or at least provide better treatment options, this trend of wearable technology can help prevent complications from diabetes by having glucose monitoring done continuously, and easily. Also, since this organization works with all age groups with diabetes, it is possible that it could allow for a better quality of life for all affected by this disease. The implications for the mission of Joslin’s Diabetes Center is to provide the best and updated care to their patients, and they are proud of the research that they continually are doing with regards to diabetes (Joslin Diabetes, n.d.). Since this wearable technology would allow for monitoring in the comfort of the patients’ home and allowing for physicians and medical personnel to monitor the levels remotely, Joslin would stay current with the trends in healthcare technology.

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Proposal Items

Initiate wearable glucose monitors with Bluetooth monitor

Purchase 100 Dexcom wearable monitors and Bluetooth devices

Bluetooth set up for physicians to monitor patients’ levels

Add educational program for staff and patients on new technology, increase staff (i.e. IT support)

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This project will incorporate wearable technology to monitor the trends of glucose levels constantly throughout the day without the need for finger sticks. The readings will be able to be shown on the Bluetooth device, or an app on a cell phone, which would allow the patient to monitor their levels, record the medication they receive, as well as any other type of data regarding their health maintenance. This device would also be able to be accessed by physicians to also monitor the trends and determine patient compliance with their treatment regimen. This would allow for better patient-centered care, and better treatment choices for these patients based on compliance and glucose level trends.

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Strategic Goals

Implement a program to monitor continuous glucose levels in order to provide better management and treatment of diabetes

Improve patient outcomes for all patients

The data collected from the continuous wearable glucose monitors will help to fulfill Joslin’s mission statement, “To prevent, treat, and cure diabetes.”

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The main purpose of this proposed project is to determine a relationship between the glucose trends in patients, their compliance with diet and medication administration, and overall healthier A1C levels. By implementing this program, there will be more research provided for further treatment of the disease and allow patients to manage their diabetes much easier. The CDC states that as of 2015, 30.3 million of the U.S population has diabetes and 84.1 million people in this population has prediabetes (2017). Treatment and management of this disease has become more costly over the years, according to the American Diabetes Association (n.d.), so the implementation of this device could help decrease patient costs by decreasing supplies needed to manage this disease.

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Options

Option one is to purchase the wearable glucometers along with the Bluetooth device.

Option two is to lease the wearable glucometers from Dexcom as a trial.

Option three is to provide no change in care, allowing patients to only monitor their blood glucose levels via finger stick

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Dexcom is the most common wearable glucometer, and if this clinic collaborated with that company and purchased these devices in bulk, it would allow for the generation of revenue, as well as patient-centered care. This device removes the need to rely on glucose readings from finger sticks, which would decrease the need for purchasing lancets, test strips and other supplies. This purchase would be similar in use to Dexcom, with easy insertion and application, hence making it easier for patients to learn and use. Since diabetic care costs are rising, this proposed item should be implemented within the first two quarters of fiscal year 2020.

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Financial Research

Drop in assets from $43,248,771 in 2012 to $34,891,187 in 2013.

Collaborate with Dexcom to determine cost of monitors & if there is a discount associated with a bulk purchase of the wearable device and Bluetooth device as a bundle

Purchasing Dexcom monitors eliminates leasing fees

Collaborate with IT department to purchase software to allow Bluetooth device set-up as well as application set up for cellphones

Collaborate with healthcare staff, researchers, and human resources to determine salaries for any new staff, and for existing staff

Increased revenue due to shorter in office appointments once a month for healthier patients, and new incoming patients requiring care

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Joslin’s financial statement for the FY 2013 shows that the total expenses for both 2012 and 2013 were greater than the total revenue. There was a financial drop in assets from 2012 to 2012. If there are more office appointments within a month due to faster visit times, as well as an influx of new patient visits, this clinic has a chance to generate revenue. With these financial statements in mind, if the wearable glucose monitors are not implemented, there would be no other way to increase this companies revenue.

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Organizational Resources

Physicians and nurses

Diabetic educators

Diabetic researchers

Adult & pediatric clinics

Renal & eye clinics

IT staff

Billing staff

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When it comes to diabetic research and management, Joslin Diabetes Center is considered world renowned. The healthcare staff of physicians and nurses, as well as researchers, are dedicated to fulfilling the mission to better treat and eventually cure diabetes. Since this staff is so dedicated to their patients and the mission of this organization, I truly believe that most staff members would want to implement wearable glucometers.

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Communication

Continuous monitoring of glucose readings with a device that alarms whenever levels reach too high or too low, based on the physician/patients’ set range

Data on patient readings will be sent via Bluetooth to physician’s office once patient comes in for monthly appointment

Monthly meetings to discuss patient data and collaborate on different treatment options if necessary

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Communication will improve between patients and healthcare staff because each month when the patients arrive for their wellness check, their Bluetooth device that is synced to their wearable glucometer, will sync to the electronic patient chart, which will download the data from the entire month. This data would include the ranges and trends of glucose levels, as well as the compliance of the patient with their medication management. Also, when the patient is not in the clinic, this device would alert the patient of irregular readings, which could remind them of proper treatment, whether insulin is needed, or if there needs to be an increase in sugar or carbohydrate intake. Patients using this device will experience patient-centered care because their data allows for specific treatment plans based on their trends.

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Statements

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Assets

Liabilities

Current Ratio

Joslin’s clinic assets are decreasing, as mentioned earlier in the slides, especially for FY 2012 to 2013. When calculating the current ratio, it is obtained by dividing assets by liabilities. These ratios are used to see if an organization will be able to generate enough revenue to pay off debt (Nowicki, 2018). If there is a current ratio of over 1, it means that the organization is financially stable enough to recover from debt. However, for Joslin, the current ratios are declining, but still remains over 1, which means that there is available room financially to implement this project.

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2011

$42,993,914

$19,247,415

2012

$43,248,771

$19,476,111

2013

$34,891,187

$18,695,139

2.23

2.22

1.87

Expenses/Reasoning

Total expenses for wearable glucometer: $81,000 (wearable glucometer, Bluetooth device monitor)

Associated costs are with educational supplies as well as tech support

Staff salaries will remain the same apart from $10,000 to implement IT staff/tech support and educators

Revenue will be generated with increased office visits, well-child visits, pregnancy care, and diabetes education

Total cost of the program: $91,750

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The current budget proposal is broken-down above, as well as a full copy attached of the proposal which provides details regarding estimated costs for this budget. Within the first year, I have estimated that the generated revenue would be up to $70,000. There was a slight increase in ancillary staff salaries due to more education provided to diabetes educators, as well as IT/tech support regarding this new product. There are no new hires, salaries are not purchased yearly and generally stay the same, so it is important to purchase these devices within the first or second quarter of the fiscal year, which would allow for an increase in revenue. There will not be any additional projects for this year, as I have proposed this program to be the way in which revenue is generated.

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Ratio’s/Calculations

Year 0 Cash Flow: $-92,750 Net Cash Flow: $-92,750

Year 1 Cash Flow: $70,000 Net Cash Flow: $-22,750

Year 2 Cash Flow: $35,000 Net Cash Flow: $57,750

Year 3 Cash Flow: $35,000 Net Cash Flow: $92,750

Year 4 Cash Flow: $35,000 Net Cash Flow: $127,750

Year 5 Cash Flow: $35,000 Net Cash Flow: $162,750

Payback period is 3 years

Net Present Value is $101,520.33 with a 3% discount rate (https://www.calculatestuff.com/financial/npv-calculator?initial_investment=91750.00&discount_rate=3.000&cash_flows%5B%5D=70000&cash_flows%5B%5D=35000&cash_flows%5B%5D=35000&cash_flows%5B%5D=35000&cash_flows%5B%5D=35000#results)

The benefit cost ratio (BCR) = discounted value of benefits/ discounted value of cost $101,520.33/$92,750 = 1.09 which is positive

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Return on Investment (ROI): (net profit/total investment) X 100 =

($162,750/$92,750) X 100 = 175.4%

This program has a goal to be paid back fully within 5 years. As shown above, the payback period, where this program allows for a breakeven point, occurs at year 3. This means that within 3 years, this program will have not only increased revenue, but the down-payment for this program will be completely paid off.

The cash flow will decrease after one year and maintain steady due to changing need for office visits.

The Net Present Value Calculator showed that the NPV is $101,520.33 with a discount rate of 3%. This shows the profitability that this program yields, and since it is higher than the initial investment, the potential for an increased revenue is almost guaranteed.

The BCR comes out to be 1.09 after dividing the discounted value of benefits and the discounted value of cost. Since this number is over 1, it is considered positive, which means that this project should be supported.

The ROI is 175.4% after the projected revenue in five years.

All calculations are positive and depict why this program will financially benefit this organization.

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Projected Departmental Budget

Total Gross Patient Services Revenue 9,950,000 $11,300,000.00 increase in revenue for projected healthier managed patients, and new influx of patients seeking treatment
EXPENSES
Salaries
MD $ 2,500,000 $2,500,000.00 MD salaries combined
RN $ 800,000 $800,000.00 RN salaries combined
LPN $ 350,000 $350,000.00 Nursing staff salaries combined
Other Staff $ 180,000 $190,000.00 tech support, educators, newer implemented employees
Total Salary Expense $ 3,830,000 $3,840,000.00 slight increase in wages for yearly salaries, implementation of new employees
SUPPLIES
Medical Supplies 485,000 485,750 sample devices, display devices for education, lancets and test strips
Office Supplies 265,000 265,000 resource manuals for new monitors for patients and employees
Total Supplies 750,000 $750,750.00
OTHER EXPENSES
Equipment $ 250,000.00 $81,000.00 wearable glucometer, bluetooth device
Legal Fees $ 108,786 $100,000.00 decreased due to better monitoring of glucose levels
Professional Fees 152,288 $152,288.00 no change in cost with this budget
Utilities 497,694 $500,000.00 no change in cost with this budget
Repairs and Maintenance 506,984 $509,000.00 slight increase for electronic devices
Insurance 154,996 $155,050.00 liability insurance, device insurance
Bad Debt Expense 80,000 $80,000.00 Uncollectable accounts, no change
TOTAL OTHER EXPENSES $ 1,750,748 $1,577,338.00
Total All Expenses $ 6,330,748 $6,168,088.00
Excess (Deficit) Revenues over Expenses $ 3,619,252 $5,131,912.00
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As shown above, this project is expected to increase the overall budget. This could increase and generate revenue, as well as provide quality patient-centered care and improved quality of life for diabetic patients. In total, this project is estimated to cost $91,750 which has been added on to the budget listed above, as well as attached in a separate spreadsheet.

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Impacts & Justifications

Short-term

$81,000 for Dexcom wearable glucometers (with Bluetooth monitor device)

Increased staffing costs of $10,000

$750 worth of educational supplies for the staff as well as patients

Recorded data and easy access to 24-hour monitoring of glucose levels to personalize patient care

Long-term

Cash flow of $70,000 for the first year

Personalized treatment plans for patients based on their personal recorded trends

Improves patient-centered care

Stays true to Joslin’s vision and mission

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The total projected budget for this project is $91,750, and if this was purchased in the first quarter, healthcare staff will be provided with the education needed to implement this device faster, which will allow for the implementation of this program to start sooner. Initially, the cost of the wearable glucose monitor will be $75,000 for 100 monitors, and the cost of the Bluetooth monitoring devices will be about $5,000 to start with an estimated $1,000 in installation fees for the 100 devices purchased. Educational supplies is estimated to cost $750, and there will be an estimated increase in staff salaries of $10,000.

Long-term implications include better patient outcomes with regards to health and disease management due to the continuous monitoring of glucose levels, and the electronic recording of these trends. Physician access to monthly trends allows for individualized treatment plans which will improve the health status of the patients at Joslin and promote self-management and compliance within the diabetic community.

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Cost-Benefit Analysis

Cost

Dexcom wearable continuous glucose monitoring devices (with Bluetooth monitoring device)

Educational supplies (staff and patients)

Salaries for staff (educators, IT)

Benefits

Allows patients to continuously monitor glucose levels

Levels recorded and synced monthly to physician records to monitor trends in glucose levels

Physicians and researchers can monitor trends and adjust treatment accordingly

Bluetooth monitor alarms if readings are too high or too low, per set range from physician

Staff members are more motivated with a feel of quality patient care

Estimated 3-year payback period, increased revenue

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When creating a cost-benefit analysis, it allows companies to estimate the costs and the benefits that go along with the estimated costs (Nowicki, 2018). The reasoning behind this analysis is to see if the benefits are worth the costs, and if the costs are worth the benefits. If there are more benefits than costs, that is a good sign that the project should be implemented.

As shown above, the benefits outweigh the costs significantly. By purchasing the wearable glucose monitors instead of leasing them, there would not be any interest charges on the lease, and the purchase price would be a one-time deposit, not a yearly fee. Overall, the implementation of the wearable continuous glucose monitors is better patient outcomes, and personalized care based on their trends in glucose levels. Each patient is different, and this proposal allows them to be treated as such.

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Strategic Planning

Joslin’s mission will be followed if this is implemented

Overall health of diabetic patients will improve with the continuous wearable glucometer

Personalized treatment plans based on individual glucose trends

Patient-centered care and quality care is the main outcome of this project

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Joslin’s mission statement focuses on advancements in the treatment and finding a cure for diabetes, which this proposed plan follows. This project shows strategic planning because it would be completed within a five-year time span, and it follows the steps of strategic planning such as planning horizon and objectives (Nowicki, 2018). Joslin is a non-profit organization, and with this proposed project, it will generate revenue from the out-patient clinic visits, which will allow more money to go into researching new treatment ideas for diabetes. This plan will also increase patient numbers because of shorter monthly visits, allowing for more time for newer patients. This will also allow Joslin to stay within the patient-centered goals it projects and even increases quality of care based on personalized treatment plans.

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Conflicts

More accurate/better working technology

Patients’ compliance could decrease overtime

Staff could become overwhelmed with managing a new device

Connection issue with the Bluetooth device could arise

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Conflicts are bound to occur with any program or project. Some conflicts that could arise with this proposed project could be future technological advances with better working devices could become available, patients’ compliance could decrease overtime which could impact their treatment and overall health, staff could become slightly overwhelmed with implementing and learning about a new device, and there could be connection issues with the Bluetooth device, or generalize malfunctioning of the device. If in the future, there are more technological developments for glucose monitoring, Joslin’s financial stability could be negatively impacted. Also, there could be additional fees related to fixing any issues with the wearable glucose devices as well as the Bluetooth monitors.

Despite these possible conflicts, I feel that this project will positively affect the diabetic community, increase the quality of patient care provided at Joslin, and ultimately it will lead to a future without diabetes; which fulfills Joslin’s vision and overall mission.

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Conclusion

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In conclusion, this proposed project will benefit all diabetic patients receiving care at Joslin, and Joslin will continue to be at the forefront of technology and research, with the hopes of finding a cure for diabetes.

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Follows Joslin’s mission to “Prevent, cure, and treat diabetes”

Provides personalized and patient-centered care

Better treatment plans based on data collected from these devices, centered on individual results

Positive financial outcome

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References

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American Diabetes Association. (n.d.). The big picture: Checking your blood glucose. Retrieved December 14, 2019. www.diabetes.org

Center for Diseases. New CDC report: More than 100 million americans have diabetes or prediabetes . (2017). Retrieved December 14, 2019, from https://www.cdc.gov/media/releases/2017/p0718-diabetes-report.html.

Dotinga, R. (2018). Hope and hype: inside the push for wearable diabetes technology. MDedge: Endocrinology. Retrieved from https://www.mdedge.com/endocrinology/article/162275/diabetes/hope-and-hype-inside-push-wearable-diabetes-technology

Joslin Diabetes Center. 2019. About Joslin. Retrieved from: https://www.joslin.org/about-joslin.html

Joslin Diabetes Center, INC. and Subsidiaries. (2012-2013). Consolidated financial statements and supplemental information. KPMG. Boston, Massachusetts.

Nowicki, M. (2018). Introduction to the financial management of healthcare organizations. (7th ed). Chicago, Illinois: Health Administration Press.

Waldron, T. (2019). Top 8 healthcare trends in 2019. Definitive Healthcare. Retrieved from https://blog.definitivehc.com/top-8-healthcare-trends-2019