Michael J. GiffordARCW President &

Chief Executive Officer

June 23, 2015

Successful Business Planning For HIV Services

Review why business planning is a key strategy at this time in the AIDS epidemic.

Learn the elements of business planning to enhance the sustainability of your organization to continue to provide vital HIV services.

Discuss examples of how business planning can lead to expanded services and enhanced performance on the care continuum.

Agenda

Business Planning: Why Now?

Greater Need• 50,000 new HIV patients each year• Historically low death rates• Patient needs becoming more complex• Exit of health care providers

Environmental Assessment

Health Care• More integrated care• Greater patient choice• Intensified focus on quality rather than

quantity• Novel models of care

Environmental Assessment

Financing HIV care and treatment• ACA alters public funding• Unauthorized Ryan White and HOPWA• Level federal appropriations• Private funding challenged by new and

different priorities and lingering effect of the Great Recession

Environmental Assessment

AIDS Organizations Financial Position• 75% of AIDS organizations have had a deficit in 1

of last three years• 15% of AIDS organizations have had a deficit in all

of the last three years• “Our heavy reliance on federal funding is hurting

us, and I think it’s only going to get worse.”• “I’m not sure how we’re going to survive.”• “We’re holding our heads above water, but just

barely sometimes.”• “We’ve probably lost 10% of income in recent

years.”

Environmental Assessment

HIV/AIDS ASO and CBO Stability & Sustainability Assessment Report, Capacity for Health Project, Asian & Pacific Islander American Health Forum September, 2013

The needs of our patients and clients are changing, becoming more health care focused and more complex, all of which our organizations must address.

The financial health of our organizations needs to be enhanced to sustain HIV services.

Why Now?

Business Planning: Key Elements

Strategic Planning vs. Business Planning

Strategic Planning Looking at strategic

options and directions Written in terms of

goals and objectives Measured in years Wish list

Business Planning Evaluating the viability

of specific business strategies and decisions

Written in terms of return on investment, staffing ratios, and volume and financial projections

Measured in months To do list

Any new business line developed and implemented by your organization must be supported by a thorough

business plan that provides executive and board leaders necessary

information – strategic, operational, legal, financial - to determine the best course forward for the organization.

Recommendation

1. Market Analysis2. Operational Analysis3. Legal & Regulatory Analysis4. Corporate Structure Analysis5. Community Relations Analysis6. Financial Analysis

Business Plan

Determine the size of the HIV market in your community and the market share that your organization can achieve.1. Identify patient base2. Identify competitors and competitive

advantages3. Identify industry trends4. Identify payor mix and trends

Market Analysis

Knowing your market from a business prospective is critical to success

Example: Market Analysis2014 2015 2016 2017 2018

Reported HIV cases 3,000 3,250 3,500 3,750 4,000

Number served by you 1,000

Number served by Org 1

500

Number served by Org 2

250

Number served by Org 3

250

Unserved 1,000

# you could begin to serve

Determine the feasibility and strategies necessary to establish new business lines.1. Staffing – current, repurpose and new2. Space – current, repurpose and new3. Scope of services to be provided4. Information technology needs5. Marketing strategies6. Business partnership opportunities7. Financial and human resources management

Operational Analysis

Assure compliance with federal and state laws and regulations. Examples may include:1. Clinic licensure2. Pharmacy licensure3. DEA requirements4. Medicaid & Medicare requirements5. Contract negotiations and

credentialing

Legal & Regulatory Analysis

Develop a structure or partnership that supports the provision of the business line.1. Current corporate structure with

expanded programming2. Subsidiary corporations - LLCs3. Joint Ventures

Corporate Structure Analysis

Traditional ASO partnerships may not enhance sustainability of services

Maintain and enhance your organization’s support through the establishment of new business lines.1. Staff2. Other HIV and health care providers3. Donors4. Public officials

Community Relations Analysis

Multiple business scenarios with key variables and complete financial

projections must be developed and scrutinized to protect your

organization’s services and financial interests.

Financial Analysis

Low - Medium - High

Income Statement• Volume• Payor Mix• Reimbursement rates• Variable costs• 3 to 5 year projections

Financial Analysis

Cash Flow• Health care revenue cycle• Timing of receipt of cash• Collectibles• Projected maximum financing needs• Length of time needed for financing

Financial Analysis

Financing• Internal financing• Access to lines of credit and loans• Donations

Financial Analysis

Well done business plans can be the basis of securing financing

Business Plan Development 3 months

Review and Approval 1 month

Implementation 6 - 12 months

Estimated Timeline

Business Planning: Improving the Cascade

ARCW Look backARCW2009

ARCW2014

Patients

Number served 2,523 est. 2,950

% with an Undetectable Viral Load 69% 85%

Financial

ARCW budget $12.5 million $45.9 million

Net Income $303,000 $1.8 million

Net Assets $4.2 million $8.9 million

Cash on hand $653,000 $3.4 million

Staff

Employees 132 191

AIDS Resource Center of Ohio Look back

ARC Ohio2011

ARC Ohio2014

Medical Patients

Number served 100 1,400

% with an Undetectable Viral Load 70% 85%

Financial

ARC Ohio budget $6 million $37 million

Business Planning: Additional Resources

Tools and Resources Resource Author Description

AIDS Resource Center of Wisconsin

ARCW

• Business planning services• Service line development• Management services

agreements• Merger support

Business Plan for Nonprofits and Social

Enterprises

Nonprofit Assistance Fund

• Includes a business plan outline created for nonprofits wishing to embark on earned income ventures.

Leader’s Guide to Creating a Successful Business Model

La Piana Associates

• Provides basic information about business plans.

• Includes worksheets, case studies, and discussion guides.

Nonprofit Strategy and Business Planning: A Fresh Look

La Piana Associates

• Outlines the difference between strategic planning and business planning and when to use each.

Fiscal Management: TARGET Center

TARGET Center

• Includes webinars, briefs, and TA opportunities for Ryan White grantees in the area of fiscal management.

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Questions?

AIDS Resource Center of Wisconsin

Thank You!

You will find slides from today’s presentation posted to the front page of our website: www.nationalhivcenter.org.

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Conclusion Slide