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Aside from reducing workers compensation claims, preventing injuries will increase cash flow by reducing the expenses associated with:
- Staff recruitment
- New hire training
- Temporary agency replacement
- Liability claims
INCREASING OPERATING INCOME
The National Safety Council estimates that $4 to $10 is spent indirectly for every $1 spent in direct workers compensation costs. Given that at least 50% of these accidents are preventable, the financial analysis would look as follows:
- If a 300 bed hospital has $ 300,000 in workers compensation claims per year, there is at least another $1,200,000 in expenses being spent to replace these injured workers, provide training for replacements, administrate the claim, and deal with decreases in staff productivity.
- If only 50% of these accidents are preventable with Diligent™, the financial analysis would look like the chart below.
Financial Managers will recognize that increasing the operating income by $750,000 per year at this hospital is the equivalent of generating $15,000,000 in new revenue each year at a 5% operating margin.
| Financial analysis (if only 50% of accidents are preventable with Diligent™) |
| Yearly workers compensation claim expense: |
$300,000 |
| Yearly indirect expenses associated with accidents: |
$1,200,000 |
| Total yearly expenses from accidents: |
$1,500,000 |
| Yearly savings of 50% reduction in expenses: |
$750,000 |
| Three year Diligent™ program impact: |
$2,250,000 |
| Estimated Diligent™ program investment: |
$300,000 |
| Program ROI: |
750% over three years |
| Program Payback: |
4 – 6 months (depending on start-up) |
IMPROVING CASH FLOW
Diligent™ is committed to improving the bottomline which is why we work with each client to design a financial solution that meets their specific needs. Our two most popular financial programs include the following:
OPTION 1 Cash for the equipment portion with clinical consultant services billed as rendered.
This three-year program option is ideal for clients who wish to avoid any finance charges within their program.
The standard Diligent™ guarantee of a 60% reduction in patient handling incidents from the pre-program baseline applies to this option. If the 60% reduction target is missed by x% in any of the three program years, then x% of that year’s fees are credited to next year’s program.
| Example |
|
| Program Costs |
$ 300,000 |
| Less Implementation Costs |
- $30,000 |
| Maximum Program Guarantee |
$270,000 ($90,000 each year for 3 years) |
OPTION 2 Monthly payment fee over the 36 months of the program.
This option is designed for clients that prefer to implement the program with an ongoing operating expense fee. The equipment remains the property of Diligent™ until the conclusion of this three-year program, at which time the client owns it. There is a low finance charge included in the monthly fee for the equipment.
The standard 60% incident reduction guarantee applies to the monthly fee option.
| Example |
|
| Program Costs |
$300,000 |
| Year 1 Monthly Fee |
$11,000 |
| Year 2 & 3 Monthly Fee |
$7,800 |
| Implementation services are amortized over the first year. |
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Given that the program is saving $ 62,500 in expenses each and every month by reducing 50% of the accidents, it is highly likely to be cash positive within the first month.
We look forward to improving the economic efficiency of your organization.
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