ABC Physicians ED Visits ABC Physicians, an XYZ provider group, has been having difficultly managing hospital emergency department utilization for their members. Given this problem, ABC's goal is to lower utilization to an overall rate of 450 emergency department visits per 1,000 members in three years. ABC Physicians is evaluating the following options to keep their members out of the emergency department. 1. Hire 1 additional practitioner to accommodate patients who call with urgent needs and see them on the same day in the doctor's office. 2. Building an additional urgent care center in the service area. 3. Adding a triage nurse line to guide a member to the appropriate site of care. Baseline information on ABC Physicians: Average annual membership of ABC physicians: 5,000. No anticipated growth in membership in the next three years. Current-state emergency department utilization: 525 visits per 1,000 members or 2,625 emergency visits per year. Average ED visit cost: $1,200. This cost is expected to remain stable over the next three years. Goal for emergency department visits per 1,000 members per year by end of year 3: 450 More information on the three options at hand: Option 1: Additional practitioner o All-in salary per practitioner per year: $90,000 o Expected to have immediate impact, and reduce overall ED visits by: 10% in Year 1 5% reduction from Year 1 to Year 2 No additional reduction in Year 3 o Alternative or offsetting costs: 50% of avoided ED visits are scheduled same day at a cost of $75 per visit 50% of avoided ED visits have no other offsetting visits or expenses

Option 2: Urgent Care o Cost to build: $250,000 (Assume cash investment in Year 1) o Expected to impact 50% of the members based on location o Expected to reduce overall ED visits by 15% in the 3-year period o Alternative or offsetting costs: 50% of avoided ED visits instead result in Urgent Care at a cost of $150 per visit 50% of avoided ED visits have no other offsetting visits or expenses

Option 3: Triage Nurse Line o Marketing materials: $5,000 per year o Other overhead costs: $20,000 per year o Reassigning existing care coordinators - no additional staffing required o Expected to reduce ED visits by:

10% in Year 1 5% from Year 1 to Year 2 No additional reduction in Year 3 o Alternative or offsetting costs: 30% of avoided ED visits are instead triaged to external Urgent Care at a cost of $150 per visit 40% of avoided ED visits are instead triaged to external Primary Care at a cost of $75 per visit 30% of avoided ED visits have no other offsetting visits or expenses

For each of the three options listed above, please calculate : 1. Gross Savings 2. Net Savings 3. Margin 4. Return on Investment Question: Which option you would recommend to ABC Physician to achieve their three-year goal?