Topics
More on Accounting & Financial Management

Mobile health vans' value proposition

Hospitals evaluate the service's return on investment

Tammy Worth, Contributor

Hospitals that utilize mobile health vans will tell anyone that bringing needed services to people in underserved areas improves population health, but with accountability and cost effectiveness increasingly important, there is a need to understand the potential financial return on this kind of service.

While no one doubts that the vans bringing primary care or focused services like dental care or preventive screenings do so for no cost or very low cost, there is not a lot of data available to pinpoint just how valuable the mobile health service is to hospitals.

[See also: Michigan Blues plan adopts mobile tech as operational strategy]

Part of the challenge with determining the return on investment of mobile health units is inherent to their use. Unlike most hospital services, the goal of mobile health is to find and care for people who can’t pay for treatment.

“St. Joe is very mission-based and we are looking for people who are low-income, uninsured and would otherwise not be able to access this kind of care,” said Dana Codron, executive director of community outreach at St. Joseph Health in Napa, Calif.

St. Joseph invests $5 million annually in mobile health clinics, about 11 percent of which is offset by reimbursements. Their mobile dental clinics, which cost about $650,000 annually to operate, are reimbursed better and see about 60 percent of costs returned.

“We anticipate a loss but we do believe it is possible to generate revenue and meet expenses if the target population is better insured,” Codron said.

Southcoast Health System’s mobile health system is also in the red, but the vans, which serve communities in southeastern Massachusetts and East Bay, Rhode Island, fill a void in those communities, said Kerry Mello, community benefits manager for the organization.

“If we put an article in the paper saying we were doing free screenings, we would get few people to come out,” she said. Having the mobile health vans allows the nonprofit hospital to go directly to the people in their communities, potentially saving lives and money down the road.

Many nonprofits like Southcoast and St. Joseph have funds set aside for mobile vans as part of their community benefit requirements.

At St. Joseph, 10 percent of net revenue and 1.5 percent of the operational budget is linked to services that care for underserved populations, Codron said. They also receive grants to offset some of the costs of the vans. Many mobile health units rely upon this kind of mixed funding for operations.

Part of the challenge of funding mobile health vans at for-profits is that, as an accounting line item, the units don’t make money. Similar to the argument for preventive services in general, the cost savings are indirect. There is an assumption that mobile units will reduce the instance of emergency room visits and keep chronic conditions from advancing to the degree where patients need higher-cost care.

Though the numbers on savings related to prevention are drastically varied depending upon their source, Trust for America’s Health has shown a return of $5.60 for every $1 spent on prevention. This is mostly found in reducing rates of diseases that can be caused by poor lifestyle habits including type 2 diabetes, high blood pressure, heart disease and some cancers. 

Some groups have tried to quantify the return on investments on these mobile health units and their calculations are positive.

“We had to prove that they aren’t just improving health, but there is a financial benefit, too,” said Jennifer Bennett, executive director of the Family Van program based at Harvard Medical School.

Bennett and colleagues worked with a formula to understand the financial viability of mobile health vans. The return on investment is equal to the value of the van divided by the annual cost to run it (i.e. emergency department costs avoided plus the value of life years saved from the services provided). 

Based on data provided in 2008 from Boston vans, they figured that the saved cost of emergency visits was more than $3 million and the value of providing preventive services was approximately $20 million a year. The cost to run the program was $567,700. The ROI was $36 for every $1 spent. 

Another program, a group of mobile asthma clinics called the Breathmobile, provides free care to underserved children in different cities across the nation. A study of Breathmobile use in Baltimore found that after a year in the program, $79.43 was saved for patients each day they were symptom free. A study of Breathmobiles in California found an ROI of $6.73 per $1 invested. They added the emergency room costs avoided and the value of quality-adjusted life years saved and divided it by the cost of the program, which was approximately $500,000 a year.

One of the reasons the cost benefits are so high is that the mobile clinics tend to serve high-risk populations that are high users of emergency departments, Bennett said. One question her group asked when they were creating the study was what patients would have done if they hadn’t visited the Family Van the day they did. Fifty-four percent said they would have gone to an emergency room.

“The establishment benefiting the most is not the Breathmobile itself in terms of dollars, but it is going to be the public health insurance system,” said Tricia Morphew, an analyst for Breathmobile. “They are able to spend less in emergency department and hospital visits.”

nike air max 90 black