FEASIBILITY STUDY SAMPLE FOR CLINIC SCHOOL / HOSPITAL / MATERNITY IN NIGERIA

TABLE OF CONTENTS

Executive Summary

Data and Assumptions

The Cost of Operating a Clinic

Potential Claim Savings

Wellness and Disease Management Opportunities

Other Considerations

Appendices

Executive Summary

The Nigeria County School District (“the District”) engaged Gallagher Benefit Services (“GBS”) to conduct a study of the feasibility of operating one or more primary care medical clinics for the benefit of employees, retirees, and their eligible dependents covered under the District’s health insurance plan. The plan is self-funded and is administered by United Healthcare (“UHC”). There are currently over 5,500 employees and 8,800 total members covered under the plan, and annual claim costs under the plan are approximately N40 million. The GBS study consisted of the following 3 separate sections.

1.      We estimated the cost of operating the clinic(s). Because of the range of costs relating to the administrative fees that we have seen from different clinic vendors, we estimate the cost using high and low administrative cost assumptions. We also assumed that more than one location would be necessary to provide access to all District employees. In the work that follows, we use the term clinic to mean the clinic concept, regardless of the number of locations.

2.      We estimated the potential reduction in claims paid under the health plan due to a combination of services provided directly at the clinic and a reduction in unnecessary services attributable to the “gatekeeper’ function played by the clinic. We made the estimates using two different assumptions about the % of primary care physician (PCP) office visits that are redirected to the clinic. We termed the assumptions “moderate” and “high” utilization.

3.      We estimated the potential for other health plan savings related to improved health of covered members as a result of wellness and disease management initiatives supported by the clinic. This is the most subjective component of the study. The projected first year results of the study are summarized in the following table. The savings associated with step 3 above are not included in this table as they are projected to emerge over a longer period of time.

Moderate Utilization High Utilization Administrative Fee Assumption Low High Low High Estimated Direct Claim Savings N1,359,838 $1,359,838 $1,970,658 $1,970,658Projected Clinic Expense N1,911,912 N2,431,080 N2,360,765 $2,879,933

Total First Year Savings/(Cost) ($552,074) ($1,071,242) ($390,107) ($909,275)