Community Nursing Program – Provider Profitability Analysis, Department of Veterans’ Affairs

Community Nursing Program – Provider Profitability Analysis, Department of Veterans’ Affairs

The Department of Veterans’ Affairs (DVA) purchases a wide range of health services for entitled persons (eligible veterans and/or their spouse) through its Community Nursing Program (CNP). The program aims to keep entitled persons living independently in the community and reduce early admission to hospital. In response to changes to external environmental changes including health policy changes and the introduction of new state and federally funded community programs, DVA engaged HMA to conduct a preliminary evaluation of the CNP.

The preliminary evaluation included an assessment of the program’s fee schedule to determine whether it was commercially viable. The analysis included:

• Trend analysis of changes in jurisdictional nursing and personal care wages and annual indexation of DVA fees to determine whether changes to the fee structure adequately accounted for changes to costs faced by providers over time.
• An assessment of whether changes to the number of services delivered by providers over time were a result of supply side or demand side factors.
• Benchmarking of the DVA fee schedule against different types of competitors in the market (profit, not-for-profit and government).
• Construction of a financial model to estimate whether the revenue gained through the CNP was sufficient to cover costs and generate profit, for different provider types.

This project was completed in February 2019.