Need Capital? A Non-Profit s Guide To Financing New Services

Transcription

1 Need Capital? A Non-Profit s Guide To Financing New Services The 2016 OPEN MINDS Strategy & Innovation Institute Wednesday, June 8, :45am 11:00am James Stewart, Chief Administrative Officer, Grafton Integrated Health Network, & Advisory Board Member, OPEN MINDS York Street, Gettysburg, Pennsylvania Phone: info@openminds.com All Rights Reserved.

2 Agenda 1. Why Do We Need Capital? 2. Perspectives From The Market: How Should You Approach Financing? Robert Q. Kreider, President & CEO, Devereux Amy Gallagher, Psy.D., Vice President, Whole Health, LLC, a subsidiary of Mind Springs Health, Inc. 3. Questions & Discussion All Rights Reserved.

3 Introduction Jamie Stewart, CEO, Grafton Integrated Health Network BS in Accounting MBA Healthcare Admin Specialty track Passed CPA in 1991 and have over 25 years experience Non-Profit Corporations Governmental Entities Bank Audits Have spent the past 16 years at the C-Level in Behavioral Health Care All Rights Reserved.

4 What Is Capital? Classic Definition(s) per Finance and Accounting Industry: The accumulated wealth of a business, represented by its assets less liabilities The value of the net stock ownership in a company Funds raised to support a particular business project Cash is used for the purchase and sale of good or services within a company or between two companies or individuals and has a more immediate purpose. Capital is different from cash. Capital is money, but also includes assets (such as investments, stocks) that are more long-term and could benefit the company in the future. It involves the aspects of a company that help build and improve it, that form its base for generating revenue All Rights Reserved.

5 Financing Options For Non-Profits Health care finance specialists who provide capital to organizations through accounts receivable purchase funding and/or asset-based loans. Angel Investors, venture capitalists, and Boutique investment banks are all sources of investment funds for opportunities that will provide a sizable return for the investor. Benefit corporations are a new option that may appeal to non-profits. Small business loans are a government-guaranteed source of capital (for those who have a tolerance for paperwork and bureaucracy). Lines of credit are sources of capital, typically from banks, that can be tapped at the borrower s discretion. Bond financing for 501(c)(3) non-profits. Grants, both corporate and government, are another source of capital for nonprofit organizations All Rights Reserved.

6 The Non-Profit Corporation Challenge Non-profits have big advantages as it relates to taxes: No taxation on income earned Property tax exemptions Excise tax exemptions Non-profits are limited in means to access unfettered capital Debt financing Donations Reserved income True capital investment by venture capital is limited/restricted No private ownership of non-profit so limited venture capital directly No marketable stock so limited outside investment All Rights Reserved.

7 Our Speakers Robert Q. Kreider, President and CEO of Devereux Behavioral Health Strategic use of your Endowment funds Monetizable Assets Use of Intellectual property Partnership opportunities Amy Gallagher, Psy.D., Vice President, Whole Health, LLC Strategic affiliation and partnerships with payers New service opportunities All Rights Reserved.

8 Robert Q. Kreider President & CEO Devereux

9 Open Minds Strategy & Innovation Institute THINK AND TALK LIKE A BANKER Bob Kreider President & CEO June 2016

10 DEVEREUX ADVANCED BEHAVIORAL HEALTH 104 year old organization founded by Philadelphia school teacher. Began national expansion in 1945 with opening of Santa Barbara programs Currently programs in 13 states Traditionally served individuals with developmental disabilities Significantly developed mental health services beginning in 1970 s (Medicaid and IDEA) Expanded child welfare services through privatization of therapeutic foster care in New Jersey (1995) and care management in Florida (early 2000 s) Current annual client revenues about $420 million, with a little more than half from campus residential campuses. Before becoming CFO of Devereux in 1994, my experience was as a bond lawyer, investment banker and financial advisor for healthcare and higher education organizations.

11 THINK AND TALK LIKE A BANKER In almost all financings, the decision maker is someone who thinks and talks like a banker. Could be banker, investment banker, rating analyst, bond insurer; increasingly, a foundation project officer. Better results if you can make your case in bankers terms (in decreasing order of importance): Cash flow (not revenue) Collateral Value proposition (essential service) Business model Friends Recognize risks, acknowledge them and have a plan to address them, exude realism and confidence Best line to use with a banker: We are a mission driven organization, but no margin no mission.

12 ALTERNATIVES TO TRADITIONAL FINANCINGS Sale/leaseback of real estate, information systems or vehicles Partnerships, joint ventures, or affiliations with financially strong organizations REITs Social Impact Bonds Self borrowing (endowment, insurance financing) Accounts Receivable

13 Amy Gallagher, Psy.D. Vice President Whole Health, LLC

14 BECOMING BEST FRIENDS WITH AN INSURANCE COMPANY AMY C. GALLAGHER, PSY.D.

15 HISTORY & OVERVIEW Conceptualization (Western Slope of Colorado) Understanding that behaviors influence health outcomes Focus on the payer plan Identified pain points Use of logic model Mind Springs Health (Community Mental Health Center) The Center for Mental Health (Community Mental Health Center) Rocky Mountain Health Plans (insurer) Shared financial risk Meet goals of the Triple Aim

16 INTERVENTIONS LOGIC MODEL Quadrant 1 Quadrant 2 Quadrant 3 Quadrant 4 Diagnostic Complexity Low Physical / Low Behavioral Low Physical / High Behavioral High Physical / Low Behavioral High Physical / High Behavioral Heightened Risks Patient Characteristics Frequent Confounding Factors Clinical Focus Accident, Disease, Disability Not Diagnostically Complex Higher Functional Ability Unhealthy Behavior Lower-Scale Depression Chronic Pain Substance Abuse Behavior Change Pain Management Addiction Disorder Accident, Disease, Disability, Major Event / Mortality Major Psych Diagnosis Lower Functional Ability Unhealthy Behavior Chronic Pain Substance Abuse Isolation Difficulty Utilizing Primary Care Care Coordination Medication Adherence Behavior Change Pain Management Addiction Disorder Primary Care Access Major Event / Mortality Major Physical Diagnosis Lower Functional Ability Unhealthy Behavior Lower-Scale Depression Chronic Pain Substance Abuse Care Coordination Medication Adherence Behavior Change Pain Management Addiction Disorder Major Event / Mortality Major Physical and Psych Co-Morbidities, Lowest Functional Ability Unhealthy Behavior Chronic Pain Substance Abuse Isolation Difficulty Utilizing Primary Care Care Coordination Medication Adherence Behavior Change Pain Management Addiction Disorder Primary Care Access Time Horizon for Outcomes Longer Term Longer Term Near Term Near Term Planned Interventions Additional Coordinated Therapy (When Necessary) Depression Screening Substance Abuse Screening Motivational Interviewing Patient Coaching Pain Protocols Substance Abuse Treatment Short-Term Therapy Trans-disciplinary Case Mgt Substance Abuse Screening Patient Coaching Navigator Services Pain Protocols Substance Abuse Treatment Trans-disciplinary Case Mgt Depression Screening Substance Abuse Screening Motivational Interviewing Patient Coaching Pain Protocols Substance Abuse Treatment Short-Term Therapy Trans-disciplinary Case Mgt Substance Abuse Screening Motivational Interviewing Patient Coaching Navigator Services Pain Protocols Substance Abuse Treatment Diagnostic Complexity Low Physical / Low Behavioral Low Physical / High Behavioral High Physical / Low Behavioral High Physical / High Behavioral 16

17 HISTORY & OVERVIEW Implementation Researched CHW work in other states Creation of week-long training program, plus opportunities for shadowing Hired initial workforce (5 CHWs across 4 counties) Strategized use of LLC in order to assist with communication and coordination Understanding of integration at the systems level Continuous program evaluation and evolution

18 FROM JANUARY 2014 TO TODAY Mesa County 6.0 CHWs 4 Primary Care Offices & RMHP unattributed Garfield & Pitkin County 2.0 FTE CHWs 2 Primary Care Offices Montrose County 1.0 FTE (with proposed additional 1.0 by end of CY2016) 5 Primary Care Offices

19 BUDGETARY CONSIDERATIONS RMHP pays for program with the expectation that the CMHC takes 30% financial risk on the entire PMPM cost of care Salaries & benefits IT equipment (e.g. laptops, EMR license, cell phones) Leased vehicles/travel expenses Training Program materials/supplies Overhead/CMHC infrastructure

20 OUTCOME MEASURES Initial data collection ER reduction Needs addressed Service utilization (primarily based up CHW contact and ER claims utilization) Revamped for 2016 Patient Activation Measure (3x) Western Slope Needs Assessment (3x) Service utilization ( deeper dive ) Medical practice report of success Medical practice narrative stories

21 OUTCOMES Top needs addressed (drove program changes and Service Delivery Pathways development): ER utilization, MH/SUD services, medical services, chronic pain, housing, oral health, legal, vision, occupational/vocational, transportation, social support ER visits trending downward (11.1% decrease) After about 18 months, PMPM decreased 3.5% Shared financial risk successful Expected significant pay out to Whole Health used to meet the mission of MSH

22 LESSONS LEARNED Continued focus on payer s pain points Creating BFFs Buy-in Ongoing communication Contributions from all involved Goodness-of-fit when hiring Rapid-cycle change mentality helpful Bio-psycho-social model of conceptualization Medical practices with integrated behavioral health may understand communication flow quicker

23 COMMUNITY HEALTH WORKERS REPORT Prior to intervention, pt had 9 ER visits Reduced to 2 within 3 months Patient now working on compliance with diabetes med Reportedly, stopped drinking and instead goes skiing or walks outside; prior leaving home was for a trip to the liquor store Pt with 90+ ER visits in 12 months, reduced to 30 and held a job for 6 months Pt dx with SPMI, prior living in assisted living Currently in independent living, narcotics-free, positive social relationships, medication compliance Pt with low social support and depressive sx Attended peer support groups, tried new coping skills, began new relationships, currently working, and reported happy

24 COMMUNITY HEALTH WORKERS REPORT Coordination-of-care with pharmacy One fill date/month, less anxiety about transportation, increased Transportation conversations are amazing Being able to model appropriate behavior for pts is so helpful and can discuss it afterward ER communicated with CHW about pt concerns CHW able to coordinate care, find assisted living, figure how pt will get psychotropic inoculations during transition-of-care, arranged out-of-county transportation, and pt reports he is happy and loves it here $50,000 savings in one through coordination-of-care efforts (saved helicopter ride and unnecessary hospitalization)

25 Questions & Discussion

26 Chronic Care Management Disability Supports & Long-Term Care Mental Health Services Addiction Treatment Social Services Intellectual & Developmental Disability Supports Child & Family Services Juvenile Justice Corrections Health Care York Street, Gettysburg, Pennsylvania Phone: info@openminds.com