MHA 599 Week 5 Financial and Risk Analysis Example

Does It Pay, and What Could Go Wrong? A Financial and Risk Analysis of Scaling Home Blood Pressure Management to Fourteen Rural Clinics

[Student Name]

University of Phoenix

MHA/599: Capstone: Leading the Organization Through Change

Week 5 Assignment

[Instructor Name]

[Date]

The health system, its volumes, revenue, costs and risk ratings are composites written for a model paper; payment rules and research findings come from the sources cited.

Six months into the four-clinic pilot, the system's chief financial officer asked whether the program should grow to all 14 clinics. He wanted three things: what it would cost, what it would return and what could go wrong. This paper provides the financial and risk analysis.

Pilot Results

The pilot enrolled 640 patients across four clinics. At six months, 78% were transmitting readings on at least 16 days a month, and blood pressure control among enrolled patients had risen from 0% at enrollment, since all were uncontrolled, to 49%. Pharmacists averaged about 200 active patients each. No serious safety events occurred.

Scale

Full expansion would serve about 2,800 patients across 14 clinics, requiring 14 pharmacist positions at full enrollment, four community health workers, a program manager, a data analyst, devices and platform fees.

One-Time Costs

One-time costs include devices for new patients, platform setup for ten more clinics, training, protocol updates and workflow changes, estimated at about $610,000.

Ongoing Costs

Ongoing annual costs at full scale are estimated at about $2.9 million, dominated by pharmacist salaries and benefits, followed by community health workers, platform fees, device replacement and program management.

Revenue From Monitoring Services

As the design paper explained, Medicare reimburses home monitoring under separate codes for the equipment and for clinicians' management time. The 2026 fee schedule also recognized shorter monitoring months, with new codes for under sixteen days of readings and for brief management time (Centers for Medicare & Medicaid Services, 2025), which allows billing for rural patients whose transmission is intermittent. About 60% of enrolled patients are Medicare beneficiaries. The finance team estimates annual billed revenue at about $2.1 million at full scale, after accounting for documentation requirements and patients who do not meet billing thresholds in some months.

Savings From Avoided Events

The larger value may come from avoided strokes and heart attacks. In the economic follow-up of the trial on which the program is modeled, intervention costs were $1,511 per patient in 2017 dollars; over five years, estimated costs of cardiovascular events were $758,000 in the intervention group compared with $1,538,000 under usual care, for a return on investment of 126% and net savings of about $1,900 per patient (Margolis et al., 2020). The trial's savings came years later, from events that did not happen.

Who Captures the Savings

Avoided events save money for whoever pays for them. Under fee-for-service insurance, fewer strokes reduce hospital revenue. Under the system's shared savings arrangement, which covers about a third of its Medicare patients, the system shares in savings. The analysis counts only the system's share of savings, not the full value to payers.

Expected Case

With 2,800 patients, 75% of Medicare patients meeting billing thresholds and shared savings accruing from year three, the program covers about 72% of its ongoing costs from revenue in year one and breaks even in year three, when shared savings begin.

Best Case

If commercial payers and Montana Medicaid cover monitoring at Medicare-like rates and shared savings begin in year two, the program breaks even in year two.

Worst Case

If transmission falls in winter, reducing billable months, and shared savings are delayed, the program requires a subsidy of about $900,000 a year for three years before savings arrive.

Quality Measures and Incentives

The program also helps the system on quality measures that affect payments. Blood pressure control is a common measure in Medicare Advantage star ratings and commercial value-based contracts. Improving control in rural clinics could raise the system's performance on these measures, with bonus payments the finance team did not include in the base case because their size is uncertain.

Nonfinancial Value

Some benefits do not appear in the model: patients saved hundreds of miles of driving, clinicians relieved of adjusting medicines on stale readings and progress on the system's commitment to rural and American Indian communities. The board weighs these alongside the numbers.

Comparing With Doing Nothing

The relevant comparison is not zero cost but the cost of current care. Uncontrolled hypertension leads to strokes and heart attacks that bring rural patients to Billings by ambulance and helicopter at great expense, much of it borne by payers and some by the system through uncompensated care and penalties.

Sensitivity

The analysis is most sensitive to three assumptions: the share of patients meeting billing thresholds, commercial and Medicaid coverage and pharmacist caseload. Raising caseload from 200 to 240 patients per pharmacist improves the margin more than any other change, if quality holds.

The Risk Register

The register rates each risk by likelihood and impact and assigns an owner.

Clinical Risk

Monitoring without effective management may not improve outcomes. The heart failure trial described in the first capstone paper is the warning: remote readings plus coaching calls left readmissions essentially unchanged (Ong et al., 2016). Likelihood for this program is low because the design keeps pharmacist management at its core, but the impact would be high. Owner: the chief medical officer, through monthly review of control rates.

Operational Risk

Pharmacist turnover or recruitment difficulty in rural Montana could slow expansion. Likelihood moderate, impact high. Owner: the pharmacy director, through a pharmacist residency partnership and remote work options.

Financial Risk

Revenue may fall short if billing documentation is incomplete. Likelihood moderate, impact moderate. Owner: the revenue cycle manager, through monthly billing audits.

Policy Risk

Payment rules for remote monitoring change frequently. Likelihood moderate, impact high. Owner: the chief financial officer, through annual review of the fee schedule and diversification toward shared savings.

Technology Risk

Device or platform failure could interrupt monitoring. Likelihood low, impact moderate. Owner: the information technology lead, through vendor service agreements and backup devices.

How the Board Will Monitor It

The finance committee will receive a quarterly program report with enrollment, transmission, control rates, billed revenue, costs and the risk register's status. If the program falls behind the worst case for two consecutive quarters, the committee will review whether to slow or redesign expansion.

Lessons From the Pilot for the Model

The pilot improved the model's assumptions. Winter storms reduced transmission for two weeks, which is now built into the worst case. Pharmacists found that patients who received a call within a day of a high reading were more likely to keep transmitting, so rapid follow-up is budgeted as part of pharmacist time rather than treated as optional.

Recommendation

Expand to all 14 clinics over 18 months, adding clinics only when the previous ones meet the transmission and control thresholds, with a board review at 12 months. The expected case supports expansion, the worst case is affordable within the population health budget and the clinical benefit is strong.

Conclusion

The program costs more than monitoring revenue alone brings in, at first. Evidence from the trial's economic follow-up suggests large savings from avoided cardiovascular events, and the system's shared savings arrangement lets it capture part of them. Scenarios, sensitivity analysis and a risk register with owners give leaders an honest picture of the program's costs, its likely returns and the ways it could fail.

References

Centers for Medicare & Medicaid Services. (2025). Medicare and Medicaid programs; CY 2026 payment policies under the physician fee schedule and other changes to Part B payment and coverage policies. Federal Register, 90, 49266. https://www.federalregister.gov/d/2025-19787

Margolis, K. L., Dehmer, S. P., Sperl-Hillen, J., O'Connor, P. J., Asche, S. E., Bergdall, A. R., Green, B. B., Nyboer, R. A., Pawloski, P. A., Trower, N. K., & Maciosek, M. V. (2020). Cardiovascular events and costs with home blood pressure telemonitoring and pharmacist management for uncontrolled hypertension. Hypertension, 76(4), 1097-1103. https://doi.org/10.1161/HYPERTENSIONAHA.120.15492

Ong, M. K., Romano, P. S., Edgington, S., Aronow, H. U., Auerbach, A. D., Black, J. T., De Marco, T., Escarce, J. J., Evangelista, L. S., Hanna, B., Ganiats, T. G., Greenberg, B. H., Greenfield, S., Kaplan, S. H., Kimchi, A., Liu, H., Lombardo, D., Mangione, C. M., Sadeghi, B., ... Fonarow, G. C. (2016). Effectiveness of remote patient monitoring after discharge of hospitalized patients with heart failure: The Better Effectiveness After Transition-Heart Failure (BEAT-HF) randomized clinical trial. JAMA Internal Medicine, 176(3), 310-318. https://doi.org/10.1001/jamainternmed.2015.7712